Aug 31, 2018
We are replaying our most popular podcast episode and will
return next week with a brand new show.
Today, we learn about five very important things you need to
watch out for in retirement. These apply whether you are already in
retirement or if you are getting ready to retire. Saving and
investing is the easy part. Things get complicated when it comes to
like withdrawing money, claiming benefits, and so on.
Main Questions Asked:
- How can you avoid simple mistakes that can trigger unnecessary
- How can you avoid trap doors that can erase decades worth of
hard work and sacrifice?
- How can you have an organized strategy and protect yourself
long before you retire?
Key Lessons Learned:
The Five Crippling Penalties That Can Blindside You in
- The social security early enrollment penalty. We are talking
about leaving a lot of money on the table that you have earned. We
want to make sure that you get all of that money back that you put
into the system.
- If you start collecting benefits at age 62, you will receive
25% less per month than if you waited for full retirement age.
Waiting may not mean that you are getting more because you have
given up four or five years-worth of checks. Everyone’s situation
is unique and requires a unique strategy.
- Medicare late enrollment penalties. There are all kinds of
rules for Medicare. If you don’t sign up during the months near
your 65th birthday it can result in dramatically increased premiums
for the rest of year life. You should sign up three months before
your 65th birthday or within eight months of leaving a job with
- 401k and IRA early withdrawal penalties. I never or almost
never recommend that people take money early out of a 401k or IRA.
There is a 10% withdrawal penalty from an IRA if you withdraw
before age 59 1/2 and before age 55 with a 401k.
- Roth accounts allow more flexibility. You can take an early
withdrawal from your contribution amount.
- If you have company stock in a 401k and you roll it over, you
can lose a potential tax break. It is extremely important to
consult with an expert when making these decisions.
- Excessive investment fees and expenses. Half of the people with
investments don’t understand the fees and expenses they pay. This
is a fast way to lose money without realizing it. The best plan is
to minimize expenses.
- 67% of Americans don’t think they pay any fees. This isn’t even
possible. Three to four percent in fees can add up very quickly.
Reducing fees is one of the best ways to put money back in your
- Required minimum distribution penalty. People are shocked when
the IRS forces them to take money out of retirement accounts when
they are 70 ½. This can push you into a higher tax bracket and
cause you to pay higher Medicare premiums. There are no required
minimum distributions with a Roth.
Links To Resources Mentioned
Money Map Retirement Review
Thank you for listening!