Tapping Retirement Funds Early
Despite countless experts advising against it, many retirees still tap their retirement funds early. It may sound like a good idea at the time, especially if you don’t have an emergency fund ready when disaster strikes, but you’ll just dig yourself deeper into a financial hole. And that hole? It’ll be nearly impossible to fill up the closer you get to retirement.
If you access your IRA and 401(k) funds early you’ll have penalties to suffer through, not to mention much less money once you actually retire. Some of these accounts do allow some funds to be withdrawn early without extra fees and penalties, but you have to be careful and you should only use them as a last resort.
The smart solution? Have an emergency fund ready to tap into instead!
Missing the Medicare Deadline
Once you leave your workplace, you’ll also leave behind your employer-based insurance. That’s when you can apply for Medicare, but failing to do so in a timely manner will result in a lack of coverage, loss of eligibility, and a 10% late-enrollment penalty.
It used to be that you had eight months to enroll but nowadays the window of opportunity is only seven months wide. So, if you enroll 7 months prior to ending your employment, you’re in good hands!
