10 Financial Mistakes Retiring AT&T Employees Can Make
There certainly is a lot to think about when retiring, such as how you’re going to remain financially stable and also stay busy. But retirement is a time you should enjoy; after all, you’ve worked hard to be stable enough to stop working and enjoy life. However, some can make financial mistakes beforehand that can put their retirement at risk, so it’s important to avoid them if possible.
To help you get the most out of your AT&T retirement plan, the team of financial advisors from Merit Financial Advisors has collected some of the biggest financial errors to avoid here!
1. Blindly Choosing a Pension Payout
One of the last things you should ever do with your AT&T retirement plan is to choose a pension payout without thinking carefully about it first. You’ll have the choice of selecting monthly pension payments or a one-time, lump-sum payout and both have their advantages and disadvantages. For example, the monthly payout basically ensures you have a paycheck coming each month for the rest of your life, while the lump-sum payout can free up those funds to make investments as you see fit.
The right choice will depend upon your daily financial needs and the goals you have for retirement in the future.
2. Not Saving Until the Last Day
Even as you approach retirement, you should still set as much money aside as you can into your AT&T 401(k) account. In fact, you could consider saving even more as your retirement day approaches because once you hit the age of 50, you can make catch-up contributions enabling you to save even more money in your account each year. Keep in mind, the more money you put aside the more it will pay off in the long-run.
3. Being Too Conservative with Your Retirement Investments
Now, being conservative is a good rule of thumb to make sure you don’t wind up in dire financial straits. But when it comes to your AT&T retirement plan, being too conservative can actually have a negative effect on your savings. This is because without investing in things that have the potential to accrue interest over a certain amount of time, your money will actually lose value in the long run, so invest in things that pose some possible risk but offer greater return potential.
4. Taking Social Security at the Wrong Age
Another source of income once you retire from AT&T will be your Social Security payments. However, it’s important you don’t begin receiving this benefit until the proper age. This is because accepting the benefit earlier on will mean it will be permanently reduced. That’s why many say it’s important to wait until you’re 70 to begin receiving Social Security payments. Of course, it also depends upon your health, financial situation, and a variety of other factors.
5. Forgetting to Update Your Estate Plan & Beneficiaries
No one likes to think of end-of-life decisions, but they’re a necessary part of retirement. Before stepping out of the office on your last day, make sure you’ve updated your beneficiaries and estate plan so that all of your AT&T retirement plans’ assets can be disbursed properly. This is to avoid uncomfortable scenarios and your family having to go to court to fight over what they believe is their fair share of your estate.
6. Retiring Without a Plan
Perhaps one of the most dangerous things to do is retire without a firm financial plan in place. This can lead to financial difficulties very quickly, especially if you’re one of the many people out there who aren’t very good with money. Working with a financial advisor can help you ensure you have a plan in place that takes your assets into account, as well as your desired lifestyle and other financial concerns.
7. Forgetting to Consolidate Your Retirement Accounts
Neglecting to consolidate your retirement accounts can easily lead to confusion. Many employees will find it beneficial to simply consolidate all of their retirement assets into one place, like an IRA, enabling them to easily manage things and potentially reduce investment costs.
8. Not Paying Off Debts
If you have some bad debts hanging over your shoulders, paying them off before retiring is a must. This is because instead of paying for the things you had planned to do during retirement, you’ll likely wind up paying off old expenses rather than those for the future. Accumulating debt later in life can cause serious problems for your retirement plans and should be avoided if possible.
9. Prioritizing Your Children Over Retirement
Everyone wants to make certain their children have what they need to start a comfortable life. However, prioritizing your children over your retirement can often cause some problems for retirees down the road. This is because you can often also be putting your own financial wellbeing in jeopardy, which is no good for anyone. So, at some point, you’ll have to let your children make a go of it on their own after giving them as much help as you can afford.
10. Neglecting Healthcare Costs
Getting older costs money, especially where healthcare is concerned. That’s why part of your AT&T retirement planning should take healthcare costs into account. Even if you don’t think you’ll ever require long-term or in-home care, it’s a good idea to prepare for the worst, that way your family isn’t financially burdened to take care of you. It’s important to note that Medicare doesn’t cover things like in-home nursing and long-term care, so setting aside a healthcare nest egg will help ensure you’re well-protected from anything that happens in the future.
Contact us today for more about AT&T retirement plans and financial advice!
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Opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Merit Financial Group, LLC an SEC registered investment advisor. Merit Financial Group, LLC, Merit and Merit Financial Advisors are separate entities from LPL Financial. Merit Financial Advisors, LLC, Merit, Merit Financial Advisors and LPL Financial are not affiliated with AT&T.