4 Financial Tasks Retirees Put Off — And the Price They Pay Later

Retirees often delay important financial tasks, despite the potential repercussions. One crucial task is taking required minimum distributions (RMDs) from tax-advantaged accounts like IRAs, Roth IRAs, 401(k)s, and profit-sharing plans. The age to start RMDs has been increasing, but not taking them or taking too little can result in hefty IRS excise taxes, ranging from 10% to 25%.

Long-term care (LTC) insurance is another neglected area, with 56% of aging adults expecting to need it. Experts recommend getting LTC insurance by age 60 for the best rates. Estate planning, including drafting a will and revocable trust, and setting up a financial power of attorney, is also frequently overlooked. These documents ensure smooth asset transfer and manage finances if the retiree becomes unable to do so.

Lastly, enrolling in Medicare during the Initial Enrollment Period is vital to avoid hefty penalties. Failing to do so for Medicare Part A can result in a premium increase of up to 10% for every year of delay, while delaying Medicare Part B can lead to an additional 10% penalty yearly.