Retirement Money and Five Financial Mistakes To Avoid by Rich Rhodes

This is the time of year when we are normally opening up to file returns on behalf of Cleveland clients, and taking a breath of “calm before the storm”.

Not this year though. Not only is actual tax filing delayed until February 12, but Congress made their end-of-year appropriations act extremely consequential, with a second stimulus, more PPP, and 5,500+ pages of jargon to wade through.

So, not only are we diving into the code (because it impacts 2020 taxes), but we are attending webinars and training together — all to ensure that we are serving YOU as effectively as possible.

Rest assured — every legal, ethical, and possible tax deduction and credit will be applied on your behalf this year. We’re committed to helping you keep all the income that is humanly possible … because we think YOU can make the best use of it — and it has been hard-earned during that donkey of a year we call 2020, after all.

If you have any questions in the meantime, here’s where you can reach us:
https://hinckleytaxservice.com/%E2%80%8B/schedule-a-call/ 

One of the topics we often discuss with our clients is their plan for “settling down for retirement”. There’s so much that goes into these conversations, of course.

Specifically today, I want to encourage you to have a clear strategy in place when it comes to saving for your sunset years.

More to the point, I’d like to see you avoid some mistakes I’ve seen a few Cuyahoga County clients make over the years. Most of which can be fixed with a good strategy, but all of which are much easier to handle when you can see them coming in advance.

Note: It perhaps goes without saying, but none of this should be construed as specific advice for your situation. These are general principles, and every person’s circumstances are obviously going to be a bit different.

But that said, it’s good to be aware of these tendencies…

Retirement Money and Five Financial Mistakes To Avoid by Rich Rhodes
“One of the greatest regrets in life is being what others would want you to be, rather than being yourself.” -Shannon L. Alder

One or two mistakes in handling your retirement money could mean paying a stiff penalty as you grow older — whether financially, or in the emotional drain that “guessing wrong” can take on you. Watch out for these mistakes we’ve seen people make over the years…

Obsessing about market losses (or gains).
Focus on your long-term needs, not the daily ups and downs of the DJIA. Catastrophic events and long-term health care needs can cause as much damage to your nest egg as a shaky market.

Forgetting about inflation and taxes.
Your retirement savings may be a lot smaller than you think when you start factoring in the rate of inflation and the taxes you’ll have to pay when you start drawing out of it.

Not saving in the last years before retirement.
Just because you’ve got only a handful of years left before you retire doesn’t mean you should go ahead and buy that new Lexus. Some people are able to build up substantial savings in their last five years of work because they get serious about saving and investing.

Believing you can withdraw more than you really can.
If you rely on average annual returns on your investments to determine just how much you can withdraw, you could be drawing down your retirement money faster than you should. Average returns are seldom steady. A safe rule of thumb: Count on a 3 percent rate of withdrawal.

Not planning for a long life.
Despite the dramatic rise in life expectancy in recent decades, many people still underestimate how long they’ll live. If you’re not thinking about longevity, you could tap out your retirement money much faster than you should. Look at the figures and add in at least a few extra years as you make your plans.

We’re here to help. Let me know if you have any questions.
https://hinckleytaxservice.com/%E2%80%8B/schedule-a-call/ 

Warmly,

 

Rich Rhodes
(330) 225-3928