5 Costly Mistakes to Avoid 5 Years Pre-Retirement

5 Mistakes to Avoid in the 5 Years Before You Retire

As you approach retirement age, it's essential to be mindful of your financial decisions. Making mistakes can have significant consequences on your post-work life, and correcting them may be challenging or even impossible. In this article, we'll explore five common errors to avoid during the five years leading up to retirement.

1. Not Adjusting Your Retirement Savings Rate

Retirement savings is a long-term process that requires consistent effort. However, many people fail to adjust their savings rate as they approach retirement age. This can lead to inadequate funds for the golden years.

• Solution: Regularly review and update your budget with TogetherBudget to ensure you're saving enough for retirement.


• Consider increasing your contributions or exploring alternative income sources, such as a side hustle or rental properties.

2. Failing to Assess Your Retirement Goals

Before retiring, it's crucial to understand what you want from this new chapter of life. This includes evaluating your financial needs, health care requirements, and personal preferences.

• Take stock: Use the next few years to assess your goals, such as travel, hobbies, or spending time with family.


• Create a vision board or write down your objectives to guide your decisions and ensure alignment with your retirement goals.

3. Not Considering Inflation

Inflation can erode the purchasing power of your savings over time. As you approach retirement, it's essential to consider this factor when planning for your post-work life.

• Be prepared: Research inflation rates and adjust your budget accordingly using TogetherBudget.


• Explore options like investing in assets that historically perform well during periods of inflation, such as real estate or precious metals.

4. Ignoring Healthcare Costs

Healthcare expenses can be a significant burden in retirement. It's essential to plan for these costs and consider factors like Medicare coverage, supplemental insurance, and long-term care.

• Get informed: Research healthcare options and costs associated with aging.


• Update your emergency fund using TogetherBudget to account for potential medical expenses.

5. Not Reviewing Your Investment Portfolio

Your investment portfolio may require adjustments as you approach retirement. It's essential to review your assets and consider rebalancing or diversifying to ensure alignment with your goals.

• Diversify: Regularly assess your investments using TogetherBudget.


• Consider consulting a financial advisor for personalized guidance on managing your portfolio during this critical period.

By being mindful of these common mistakes, you can avoid potential pitfalls and set yourself up for success in retirement. Remember to regularly review and update your budget with TogetherBudget to ensure you're on track to achieve your financial goals.

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By Malik Abualzait