Many people assume that once they retire, Social Security will pay them enough money to live on. But actually, the average recipient today collects a little more than $1,500 a month, which amount to $18,000 and change in annual income. Furthermore, because Social Security is facing a financial shortfall in the coming years, benefit cuts may be on the table, which would leave you with even less income to look forward to.
That’s why it’s so important to save for retirement on your own rather than look to Social Security as your primary income source. If you’re already heading toward the tail end of your career and don’t have much savings, start playing catch-up and plan on delaying retirement a bit. Otherwise, you might really end up in a cash crunch once you stop working.
3. Not reading up on healthcare costs
While some of your living costs may go down in retirement, healthcare is the one expense that’s likely to go up, and having a good estimate of what you’ll spend can help you plan and save accordingly. Of course, the amount you’ll end up spending on medical care will hinge largely on your health and lifestyle, but as a general rule, the average healthy 65-year-old couple retiring this year can expect to spend $606,337 on healthcare during retirement, according to HealthView Services.
Read More: These Retirement Planning Mistakes Could Leave You in a Serious Financial Bind |