Avoid These Mistakes If You Are Retiring from the Railroad in the Next 5 Years

As you approach retirement from the railroad, it's crucial to avoid costly mistakes that could impact your financial security. Welcome to another session of the Highball Advisors Railroad Retirement Whiteboard. I'm John McNamara, your host from Highball Advisors. I often receive inquiries from railroaders contemplating retirement at short notice. However, many aspects of retirement planning can and should be addressed years in advance. Today, I want to highlight six key considerations to ponder during the last five years leading up to retirement.

Firstly, make sure to maximize your retirement contributions during these final years. This is your last opportunity to bolster your savings significantly, so seize it by contributing as much as possible. Remember, retirement marks the transition from accumulation to decumulation, so it's essential to have a substantial nest egg.

Secondly, thoroughly analyze your railroad retirement and social security benefits. Understand the intricacies of your benefits, including potential spousal annuities, survivor benefits, and other sources of guaranteed retirement income. Don't leave this crucial aspect until the last minute.

Thirdly, avoid taking on unnecessary debt as you approach retirement. Excessive debt can hamper your ability to maximize retirement contributions and jeopardize your financial stability during retirement. Prioritize prudent financial decisions to ensure a comfortable retirement.

Next, adjust your investment strategy to align with your nearing retirement age. While high-risk investments might have been suitable in your younger years, it's time to focus on building a balanced portfolio that minimizes risk. Avoid speculative ventures and prioritize stability in your investments.

Furthermore, resist overspending on your children at the expense of your retirement savings. While it's natural to want the best for your children, remember that your retirement security should take precedence. Strike a balance between supporting your children and securing your financial future.

Lastly, don't neglect to plan for your desired lifestyle in retirement. Consider what activities and experiences you envision for your retirement years and plan your finances accordingly. Whether it's downsizing your home, traveling, or pursuing hobbies, ensure that your financial resources align with your retirement aspirations.

By addressing these considerations in the five years leading up to retirement, you can significantly enhance your financial preparedness and enjoy a fulfilling retirement. For more detailed guidance on navigating the railroad retirement process, explore the resources available through Highball Advisors. Remember to subscribe to our YouTube channel for additional insights and updates. Until next time, stay safe, stay focused on your goals, and take care. Farewell, everyone.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.