Retirement, also known as the golden years, is a time when we end our careers and focus on health, leisure, and loved ones. When you stop working, however, you often need affordable housing options, a healthy daily routine, adequate healthcare, and hefty retirement savings. There are many ways to prepare for these necessities, but there are some common mistakes people make when they plan for retirement. To avoid them, learn what they are and how to implement better practices.

Saving Too Late

Since retirement takes place during the later part of life, it may seem like you have a lot of time to save. However, you’re saving up for years of life without working, and you’ll likely want to travel or enjoy amenities while you’re retired. These costs add up, and you don’t want to deal with the stress of financial insecurity during your retirement years. Save up as early as you can. Ideally, this is around age 25-30 in order to save without stressing your finances. All circumstances are different, however. If you’re worried, consult with a financial advisor to discuss your options.

Ignoring Employer Retirement Plans

Retirement plans offered by employers, like a 401(k) or Roth IRA (individual retirement account), are very beneficial for saving. Typically, these plans are pre-tax, meaning the savings are taken from your paycheck before taxes are, allowing you to save more while reducing the taxes you have to pay. Additionally, many plans are matched by your employers, which means your employer will help fund your retirement savings! It’s not unusual for some people to avoid these plans in order to have more income at the present moment, but they usually end up regretting it. Take advantage of those plans while you can.

Not Considering Inflation

Do you remember the cost of groceries or other goods from ten years ago? They were much different, especially when you factor in the recent inflation surges. Ten years from now, prices will also be different. For those who are still a few decades away from retirement, the cost of housing, groceries, and other services will likely be very different. If you don’t factor inflation into your retirement saving approaches, you probably won’t save enough. Inflation is the concept of price increases over time. Retirement plans like a 401(k) can help generate returns to reduce the impact of inflation. If you don’t have access to these, you may want to diversify your income or savings to adjust for inflation. A financial advisor can help you with this.

Applying for Early Social Security Benefits

Social Security benefits are retirement funds granted to Americans when they reach a certain age (typically 65, 67, or 70, depending on birth year). You can usually withdraw Social Security benefits as early as age 62, but you won’t receive the full amount; 30% is deducted to account for the longer amount of time you’ll need the benefits. If you can afford it, wait until full retirement age to apply for your Social Security benefits. You’ll get more benefits that way.

Not Factoring Housing Costs

Housing costs a lot of money, and with inflation, it will likely cost more by the time you retire. If you own a house and have paid off your mortgage by the time you retire, you will likely only have to worry about paying utilities, healthcare, and other necessities during that period. However, some people may still be paying off their mortgage if they buy a house later in life. Other times, they need or want to move to a senior or assisted living community, which can cost thousands of dollars per month. People who rent instead of own their homes will need to factor in rental costs after they stop working. Consider housing costs and options when you save for retirement.

Not Vetting Retirement Communities

Similar to the costs related to housing, it’s not uncommon to ignore red flags associated with retirement communities. From overpriced rent to reports of nursing home abuse, there are many risks when you choose a retirement or senior community without proper vetting. It’s imperative to research community or company history, browse all-time and recent reviews, and evaluate official quality ratings before choosing to move to any community or facility. Some communities may appear impressive in some areas but suffer in others. For example, there is a 75% mobility improvement rate at Lanier Rehabilitation Center, but many residents have issued complaints regarding care standards and neglect. Be careful and stay vigilant.

Not Researching Healthcare Options

As we get older, healthcare becomes more urgent and frequent. You’ll need a solid medical team and insurance plan to take care of your health during retirement. There are many insurance options for retirees, including the government’s Medicare. It’s not unusual for people to ignore retirement healthcare until the time comes, which can leave you feeling stressed, lost, and without options. Learn about how health insurance works after you retire. Understand all of your insurance options and costs. Research what plan may work best for your situation, even if you don’t know the full picture yet. Planning and preparation are key to a healthy retirement!