When planning for retirement, you want to have all of your bases covered. You want to have enough money to pay for your basic needs, plus a little extra to have some fun during your retirement years. After all, you have worked hard for it, right? Unfortunately, there are a number of financial decisions that you may face as you near retirement that could derail your retirement plans completely. The fallout from these financial decisions could take years to repair, if its even possible to fix the damage. Here are some of the
financial decisions that could ruin your retirement plans.
Taking Out A Reverse Mortgage
Many seniors are taking out reverse mortgages on their homes without fully understanding the agreement they are signing. Reverse mortgages are advertised as a way for seniors to obtain additional income from their home while they are still living in it, making the mortgages seem like a win-win situation for everyone. In reality, these mortgages are fraught with danger and could result in the senior losing their home during their retirement years, when they can least afford it. Even worse, it could result in the spouse of the borrower may be forced to leave the home when the borrowing spouse dies. There are many other options for getting additional money during your retirement years that will not result in the loss of your home, so explore those options instead.
Co-Signing On A Financial Product
While it might seem like a good idea to help out your child or a close family member by co-signing on a loan or some other type of financial product, this can be one of the more damaging financial decisions that affect your retirement plans. Even if one party promises to be responsible for the loan, but parties are punished equally with drops in their credit score if the required payment is made late or missed. Instead of co-signing for a financial product from a lender, lend the person the money yourself or take out a loan that you are solely responsible for and draw up a contract for how they plan to pay you back.
Neglecting To Check Your Credit Report
Many retirees make the mistake of thinking that just because they are not using their credit information, no one else is either. Unfortunately, seniors are frequently targeted by scam artists that steal their personal information to open credit accounts in their names. In many cases, the person does not even know that their personal information has been compromised until they are turned down for credit or are contacted by a debt collector. You should check each of your credit reports with the three major credit bureaus at least once each year. A free copy of each of your credit reports can be obtained from www.annualcreditreport.com.