6 Of The Most Costly Mistakes & Risks for Texas Retirees
#1 Social Security Blunders
Too many people take social security at the wrong time
Too many people take social security too early
Some take it early because of need, others because of fear that social security income will disappear due to funding problems
Very few people have actually seen the financial numbers relevant to their own situation to see how much money they may be potentially costing themselves by taking social security at the wrong time
A wise investor should consider having a report run that shows their current strategy vs an optimal strategy. The software and reports from LifeYield (one software that we use) helped retirees identify optimal strategies with $140,000 in potential additional lifetime income per household in 2020 on average. (source)
#2 Drawdown Risk
Many people are unfamiliar with the term drawdown
It's pretty simple: basically it's how much your portfolio can decrease due to losses, withdrawals, fees, etc.
Unfortunatlely, many people don't appreciate the term until their portfolio has drawn down to that "I want to throw up" level
Understanding drawdown can help you better understand the potential risk so that you can assess if the risk you are potentially taking is in line with your ability to emotionally or financially withstand such drawdown
Are you 100% comfortable with your drawdown risk?
#3 Emotional Risk
Read this article by Kiplinger entitled "The Psychology Behind Your Worst Investment Decisions"
Emotions are one of the leading factors of risks and mistakes in retirement
Stop letting your emotions drive your investment decisions. Instead, consider working with a financial professional who can help reduce the Emotional Risks associated with investing
#4 House Transfer Risks
Many people believe that owning real estate in Texas with their spouse as tenants in common will automatically transfer their real estate to their sposue at death
But they're typically wrong becuase special language in the deed (or a special type of deed) is typically necessary in order to trasnfer your real estate to your spouse without the need for probating such asset
As a result, many people find themselves in probate court, and probate court costs money for attorneys and filing fees
Additionally, an asset in probate typically means that it's subject to Medicaid Recovery if Medicaid advanced funds for your nusring home
We encourage you to speak with an estate planning attorney to assess your particular situation
#5 Closed-Minded Risk
Some people refuse to get a 2nd opinion
Some are closed-minded to such discussion beceause of pre-conceived notions
But your life savings is too important to not get a 2nd opinion
Are you opposed to learning new things?
#6 Withdrawal Rate Risk
Are you drawing too much money relative to your investible assets?
Some investors just take too much dang money from their portfolio, for one reason or another
Have you seen the statistics on withdrawal rate risk?
Are you opposed to using statistics to help guide your retirement decisions?
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