Having a sizeable retirement fund set aside can help you enjoy a comfortable retirement. It will give you some sense of financial security when you do reach this stage in life. But you also need to be aware that you may still be at risk of going broke during retirement if you are not careful with your finances. Here are some common reasons that may lead many retirees to end up being broke.
Depending On A Single Income Source
Surviving retirement is a means of finding some way to earn income. It is important to ensure that your retirement fund will not run out. Most people make the mistake of relying only on just a single income source during their retirement. Many depend on getting their income from Social Security pensions, which generally will not be enough to cover one’s retirement expenses. The problem with a single income stream is that retirees will not have any option when that income stream eventually dries up or become insufficient. Try to diversify your income sources into multiple streams in order to avoid this possible scenario.
Most retirees expect to enjoy more leisure time during retirement. But the same thing they expect can also be the reason they may go broke if they are not careful with their expenses. Any retiree can easily go broke when they start spending more than what their funds can provide for them. It will only take some time before that retirement fund dries up. Avoid this mistake by creating a retirement budget that provides you with better control of how you spend your retirement fund. Make sure that your budget is made based on prolonging your retirement fund for as long as possible.
Neglecting Your Health
While retirement may be a time for relaxation, you may not be able to enjoy as much if you end up with a variety of health conditions. Ending up unhealthy will bring about added medical costs which can eat up on your retirement fund. Increasing medical expenses along with a dwindling retirement fund will become a very serious problem later on.