Wondering what’s most important as you near retirement? How about, what’s the worst course of action you can be taking? Find out the top three worst financial decisions you can make as you enter into retirement.
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There are so many decisions you have to make as you near retirement. Add on the current pandemic, and you might be extra stressed about making the right call. On this episode of Cover Your Assets KC, David shares the top worst decisions you can make right before retirement and how to avoid them.
When you enter retirement, you don’t want to be dragging along your debt with you. Of course, there is a difference between good debt and bad debt. Consider putting off your retirement until all of your bad debt is paid off to avoid this bad decision.
Do you have a clear strategy for claiming your Social Security? Depending on when you decide to take it out, it will change the amount you get per month. For many people, delaying the start of it will be the better decision. But the strategy needs to be based on you and your situation. David breaks down how the numbers work depending on when you begin to take out Social Security as well as some of the variables you should consider.
Have you thoroughly considered the tax ramifications of your retirement accounts? Your tax bracket may change in retirement, especially as your deductions change. Your income may be lower in retirement, but with lower deductions, don’t count on being in a lower tax bracket. The tax rates may change altogether in the future! David shares the strategies a few different people have implemented in order to address the probable taxes later on.
Listen to the full episode or click on the timestamps below to hear a specific segment.
[1:56] – What are some of the worst decisions you can make as you approach retirement?
[3:05] – Bad Decision #1: Entering retirement with too much debt.
[5:40] – Bad Decision #2: Not having a strategy for claiming Social Security.
[9:55] – Bad Decision #3: Not understanding the tax consequences on your retirement accounts.
[12:46] – What is the estimate of where tax rates are going to go?
[14:41] – What’s the solution to the potential tax later?
[19:14] – What’s the current status at KC Financial Advisors and how are they conducting business?
PODCAST: Debt and Retirement
PODCAST: Social Security Misunderstandings