6 retirement saving pitfalls and how to avoid them

By Alaina Tweddale

For Savings Accounts

Published: Wednesday, April 9 2014 1:05 p.m. MDT

Many new retirees find themselves unprepared for today's staggering medical costs. A recent study from Fidelity found that a typical couple retiring today at age 65 will need $240,000 to cover future health care costs. The cost goes up if the couple is not eligible for Medicare (early retirees are not), needs Medigap coverage or buys long-term care insurance. An early analysis of expected costs can help keep a retirement nest egg from early depletion.

6. Falling victim to a scam

"Retirees and pre-retirees are particularly vulnerable to scams," says Birken. "They have a big nest egg because they've been saving their entire lives and (at the same time) they are fiercely guarding their independence."

After decades of being the financial decision-maker for the family, explains Birken, many empty-nesters are uncomfortable asking family members for advice. This self-created isolation can leave this highly targeted group particularly vulnerable to financial scams. In her book, Birken explains that those over age 60 are swindled out of a staggering $2.9 billion per year.

To avoid being the victim of a scam, Birken recommends retirees ask a lot of questions: "Don't invest in anything you don't understand," she said. Avoid financial opportunities that must be acted upon immediately, and share potential opportunities with a trusted adviser or financially educated loved one before taking action.

For many, retirement confidence goes hand in hand with proper financial planning. According to Birken, "Having the necessary foreknowledge to avoid pitfalls can keep you from jeopardizing the retirement you want and deserve."

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