Baby boomers are not properly planning for their retirement – how they can fix things before it’s too late

Attention, baby boomers: $1 million may not mean as much as it used to, but tens of thousands of you could lose that much or more over your retirement by making a few common financial mistakes — mistakes that are easily avoided.

Here are three ways baby boomers are not properly planning for their retirement, and how they can fix things before it’s too late.

1. Not efficiently planning for health care costs in retirement

A 65-year-old couple retiring today could easily face more than $615,000 in combined Medicare premiums and health care costs over the next 20 years. At the same time, Washington has already passed laws and regulations that will tax more Social Security benefits and impose severe Medicare Part B surcharges, fees and penalties on “affluent” baby boomers who haven’t properly planned for their retirement.

Taxes in 2015: 7 changes and 9 weird deductions
Solution: Get a detailed, honest analysis of what your projected health care expenses will be in retirement. Health care expenses vary by state

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Once you retire and start living off your savings, things need to change. How you take money out of your retirement savings should be very different from how you put money in.

If you retire when the market is peaking, your investment returns while in retirement are likely going to be lower than those of someone who retires when the market has bottomed out. This is known as sequence risk, and baby boomers who are retiring when the market is near all-time highs should have a plan in place to protect their profits and avoid this risk.

Solution: Back-test your current portfolio — see how your current holdings would have performed in a market crash like that of 2008-09, and make sure you have steps in place to protect yourself.

3. Not having a comprehensive, integrated retirement income plan

Most boomers have a retirement plan, but a retirement income plan is different.

For most boomers, their investments are set up one way, their insurance another, and their tax preparer does just that — prepares their taxes. You want to integrate the three and find ways to optimize and synchronize everything. If you think you have a good plan, get a second opinion from an unbiased outsider.

Solution: A good Certified Financial Planner who does proactive tax planning with some advanced designations around retirement planning can show you how you can combine different accounts and take steps today to save hundreds of thousands of dollars in fees, expenses and taxes.