When you’re about to retire, you’ll want to start making most of your financial decisions with your retirement in mind. As you get closer and closer to your retirement date, you’ll want to contribute all you can to your retirement savings accounts. You’ll also want to prepare for any expenses you may incur during your retirement. In the weeks and months before you retire, it’s important to be very careful with your financial decisions. If you make too many wrong decisions, you could potentially have a lot less money available to use in your golden years.
If you’re getting ready to retire very soon, here are nine financial mistakes that you should try your hardest to avoid making.
1) Early Withdrawal from Retirement Savings
Many people make the mistake of withdrawing money too early from their retirement savings accounts.
Doing this will naturally result in you having much less money to spend while you retire. You may also get penalties for withdrawing money too early. If you withdraw money from your 401(k) before you’re 59½, you may be subject to a 10 percent early distribution penalty tax. You’ll also have to pay income tax on the amount you withdrew. Many people choose to cash out their 401(k) when they change jobs, but this could result in you losing a lot of money each month when you retire. Instead of cashing out, roll over the funds to your new employer’s 401(k). Or, if that isn’t an option, put the funds in your own savings account. This way, you’ll have plenty of funds waiting in your account when you retire.