Planning to retire in 2026? With retirement right around the corner, not all retirement moves will set you up for the financially stable, stress-free lifestyle you\u2019re hoping for. Some decisions can shrink your savings or limit your flexibility once you\u2019re out of the workforce.<\/p>\n
According to finance experts, here are retirement<\/a> moves you\u2019ll regret if you plan to retire in 2026<\/a>.<\/p>\n If you\u2019re a business owner and looking to retire in 2026, Paul Cheetham, CEO and founder of Vanla Group<\/a>, a boutique mergers and acquisitions firm specializing in small to midsize business transactions, suggested speaking with a tax advisor and switching your strategy from tax minimization to a profit maximization strategy.<\/p>\n \u201cThis is a foreign concept to a lot of tax professionals who believe they\u2019re helping you out by saving you money on taxes,\u201d Cheetham wrote in an email. \u201cHowever, when you go to sell, the buyer will use a bank to finance the transaction and their credit department will rely heavily on the tax returns of the business for debt servicing calculations.\u201d<\/p>\n And by paying slightly more taxes now, Cheetham explained that you would be significantly increasing the valuation of your company in 2026.<\/p>\n Read More: 64% of Americans Aren\u2019t Prepared For Retirement \u2014 and 48% Don\u2019t Care<\/a><\/p>\n Check Out: 5 Clever Ways Retirees Are Earning Up To $1K per Month From Home<\/a><\/p>\n \u201cWe often see long-term investors selling assets to \u2018play it safe,\u2019 and that passive attrition of a retirement runway can be a silent killer,\u201d Erik Croak, CFP, accredited wealth management advisor and president of Croak Capital<\/a>, an Ohio-based fiduciary financial firm, wrote in an email.<\/p>\n For example, someone with $500,000 in a 60\/40 portfolio assumes short-term risk reduction means cash or certificates of deposit<\/a>, Croak explained, so they move those assets out of the market. \u201cThe issue is once those assets are out, they are no longer growing,\u201d he said.<\/p>\n Moving too early to \u201cprotect\u201d also allows inflation to slowly erode its purchasing power with no return growth. \u201cIn five years, they will look back on that decision with regret as they struggle to generate income that has not kept up,\u201d he added.<\/p>\n Underestimating your healthcare costs<\/a> and timing could also derail your retirement plans for 2026.<\/p>\n \u201cCOBRA does not last forever, and Medicare eligibility starts at age 65. So retiring at 62 means three years until you can lock in that government health insurance option,\u201d Croak explained.<\/p>\n Until you qualify for Medicare, you\u2019ll need private coverage. \u201cI suspect we should plan for $1,000-$1,500 per month, per person for premiums alone,\u201d he explained.<\/p>\n There are also out-of-pocket costs to consider. \u201cWhen you do the math, it can run through $50K before Medicare coverage even starts,\u201d Croak estimated. \u201cGuess what, that doesn\u2019t appear in your early retirement calculators.\u201d<\/p>\n Tax timing can fall apart faster than most people plan. According to Croak, retirees who take the \u201cwait and see\u201d approach on required minimum distributions (RMDs)<\/a> often miss the short time frame where there is a window to use Roth conversions and income spreading to drive lifetime tax savings.<\/p>\n \u201cBy the way, there is this blind spot with capital gains harvesting as well,\u201d he added. \u201cI find that many just push that decision down the road with the lazy assumption that their tax rate will be lower in retirement when the market is \u2018helping\u2019 them \u2026 only to end up with a higher effective tax rate when RMDs, Social Security and investment drawdowns push them into a higher bracket.\u201d<\/p>\n Relying on a generic rule of thumb can also hold you back in retirement.<\/p>\n \u201cI suspect those rules are more harmful than helpful when real money is on the line,\u201d Croak said. \u201cAnybody who is relying on \u20184 percent\u2019 withdrawal math or cookie-cutter glide paths is likely underestimating just how different their household dynamics, tax profile or market exposure could be from the rest of the crowd.\u201d<\/p>\n Even the best laid plans will fall apart if you quit before finishing long-term income planning.<\/p>\n \u201cRetiring with a 401(k) balance but no withdrawal plan, no tax diversification strategy and no pre-determined glidepath is like jumping out of an airplane before your parachute has been unpacked yet,\u201d Croak said. \u201cIt could all go well, sure, but the person with $1.5 million across pretax, Roth and brokerage can easily retire efficiently or lose $15,000 per year to bad sequencing.\u201d<\/p>\n According to Croak, it\u2019s not the size of the nest egg that matters, but the withdrawal strategy. \u201cAnd it needs to be written down (and signed) before your last day on the job,\u201d he explained.<\/p>\n More From GOBankingRates<\/p>\n This article originally appeared on GOBankingRates.com<\/a>: I\u2019m a Financial Planner: 6 Retirement Moves You\u2019ll Regret If You Plan To Retire in 2026<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Planning to retire in 2026? 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