Everyone envisions their Retirement years as golden—a comfortable lifestyle with plenty of time to cycle through periods of relaxation and leisure. You already know that you can’t work forever. And even though you may be optimistic about your financial future, it’s important to have a retirement plan. But saving for retirement is complicated and can be confusing. 

Every decision you make before and during retirement can have irreversible consequences. As such, it’s crucial that you get good, objective personal and financial planning advice before you retire. When you’re young and energetic, it’s relatively easy to learn from your mistakes and recover from financial planning slip-ups. However, it will be very costly if you make mistakes during retirement. 

Simply having a little savings and Social Security Benefits doesn’t necessarily mean everything will sort itself out. Retirement planning is something that doesn’t stop when you retire. While you can’t be sure exactly how your retirement will look like, you can prepare for it. Avoiding these five retirement planning mistakes will help keep your retirement goals on track. 

Not Starting Early Enough

According to a 2019 Bankrate Financial Security Survey, one of the biggest financial regrets of many Americans is not saving for retirement sooner. The survey revealed that 17 percent of Americans wish they had started saving early enough while 56 percent regret not saving more. 

The truth is that many people wait until they are in their late 40s and 50s before they start saving for retirement. And as you can see, they always wish they’d started as early as possible. So, this is the first mistake you want to avoid as you prepare for retirement. 

No matter your current situation, age, or status, today is the best time to start saving for retirement. You don’t want to wait too long or for ‘someday’ to start. The best decision you can make right now is to cut back on your expenses and prioritize your retirement savings. Starting early will allow you to contribute less money to your retirement account than you would later on. 

Most financial planning experts recommend that you invest at least 10 percent to 15 percent of your total income into retirement savings. Keep in mind that every dollar you invest today will continue to grow until you retire. 

Taking Social Security Too Early

You can claim your social security benefits as early as age 62, but your monthly benefit will be up to 30 percent less than what you’d have received if you held off until your full retirement age — usually at age 66 or 67, depending on your year of birth. Waiting until age 70 is even better as you’ll receive the maximum benefits. If you’re in poor health and believe you’re less likely to live a long life, then applying for your benefits early makes financial sense. However, if you can afford it, consider putting off claiming until age 70. 

Investing Unwisely and Falling for Get-Rich-Quick Scams

It’s not uncommon for retirees to fall for get-rich-quick and too-good-to-be-true offers. According to the Federal Trade Commission (FTC), American adults aged 60 and older lose hundreds of millions of dollars every year on lottery scams, government imposter scams, sweepstakes, timeshare resales, and investment scams. So, you want to be careful when making investment decisions in retirement.

Whether it’s a self-directed IRA or your company’s retirement plan, you don’t want to risk your entire savings by investing in ultra-risky options. For most retirees, better investment options include low-fee index mutual funds and exchange-traded funds. And when you receive calls from anyone with a too-good-to-be-true offer don’t give in to their cheap talk. They only have one goal: to swindle your hard-earned retirement dollars. You can always check with your state attorney general or local consumer protection office whenever you spot a company with too-good-to-be-true offers. 

Not Leveraging Your Home Equity

Many retirees don’t count their home equity when coming up with a retirement income plan. To them, a home is a personal asset that only offers a place to live. They also believe that selling their home is the most convenient way to get cash from it. But that’s not true. If you’re a late starter and playing catch-up on retirement income planning, not leveraging your home equity is a mistake you don’t want to make.

The equity in your home can be an excellent source of retirement income in some situations. You can either take out a home equity loan (second mortgage), home equity line of credit (HELOC) or a reverse mortgage (check out this reverse mortgage calculator from All Reverse Mortgage). So, if you’ve paid off most of your mortgage, don’t be afraid to use part of your home’s value to gain financial leverage and fund your retirement. 

Not Planning for Health Care Expenses

According to the National Retirement Institute, 56 percent of American retirees are worried about not having enough funds to cater for unplanned healthcare costs in retirement. With the current healthcare cost trends in the country, it’s no surprise many retirees are concerned about medical expenses becoming too burdensome.

That said, it’s important that you stay healthy and have regular medical check-ups. Plus, plan to purchase a medical insurance cover to supplement Medicare as it only covers about 80 percent of healthcare costs for retirees. Otherwise, you’ll have to always pay the balance out of pocket.