#2 You forgot about taxes
While everyone is worried about taxes even before they retire, the golden years do not come with the added benefit that you can forget about them completely. And if you’ve forgotten that you’ll have to pay income taxes on your 401(k) or IRA withdrawals, that’s a big sign you’re on your way to bankruptcy faster than anyone expected!
Before you commit to taking out the money you need from the account, you should take into consideration that you will also have to pay back taxes, so you will have to take out more than you expected. This can end up in total disaster for some seniors who have not thought about it beforehand.
A good idea is to make sure your retirement funds are split between tax-deferred, tax-free, and taxable accounts so that when the time comes to pay taxes, they will not be eating away at your savings as fast.
