August 5, 2014 – Note, this is the 3rd article in our series on how to avoid wrecking your retirement. The first 2 articles can be found in “Further Reading” below.
Retirement is hard enough without making a self-inflicted, hard to recover from mistake. To help you avoid that trauma we have searched through comments to our previous retirement surveys and the general literature for the items that retirees tend to cite as the most serious errors they made. If you have ideas on the kinds of things to avoid, please share your ideas in the Comments section below.
1. Don’t build a dream house. There were several laments in one of our previous surveys from members who found it all too easy to get into building or buying a retirement dream house that got out of control. Only too late did they realize that what they were building was too big for the reality of their retirement. Too big means hard to maintain, heat/cool, and pay taxes on. It might not be set up with enough Universal Design features like one-floor living, no steps, accessible counters, door levers instead of handles, ability to add an elevator, etc. Children or grandchildren don’t come to stay as often as you thought they might, so don’t buy for them. Think about a house with at most 3 bedrooms, with one of those set up as an office. Or better yet, have an office that easily converts to the 2nd bedroom. Use the money you save to take the kids on a cruise. Just for fun, buy or rent the movie, “Tiny, A Story about Living Small“, on Netflix. It’s about the popular movement to very tiny (just over 100 to 300 sq.ft.) houses. While they are probably not for most people over 60, it does show you why you don’t need as much as you think.
2. Don’t retire too soon. We’ve learned that way too many folks can’t wait to step into retirement, only to realize they miss work. If work is really important to you and you enjoy your job, why should you stop? If you truly hate your job or your boss, make a career shift instead.
Others find they don’t miss the job so much, but don’t have enough money to enjoy a comfortable retirement. The advice we hear is to postpone your retirement as long as you can – it will give you more time to save more money and build your Social Security benefits – which will give you more money to enjoy in your retirement.
3. Don’t fail to do any retirement planning before you retire. Sure, it seems like a lot to ask to concentrate on retirement planning while you are still working and have so many irons in the fire. But taken in small doses, you can accomplish important spade work that can improve your future retirement happiness. Here are 2 things that are easy to do along that line. First, take the quizzes in our Free Baby Boomer Guide eBook. We’ve had tremendously positive feedback from members who have used them as a starting point to tease out their own retirement priorities, as well as discuss them with their spouse or significant other. Second, devote a fraction of your existing vacation, weekend, and business trips for retirement scouting. Every time you travel, investigate the towns on your route as a potential “best place to retire”. Look around, ask people questions, take a tour through any active adult communities that might be in the area. Take notes, and even consider a plus and minus spread sheet you can refer back to.
4. Don’t put your adult children ahead of your retirement needs. You’ve probably made a lot of sacrifices for your children, including putting them through college. They might or might not have turned out as successful as you had hoped, but now your retirement security is more important. Don’t cosign on a loan that jeopardizes your financial future. Don’t give them gifts or loans that are more than you can afford. If you don’t save everything you can now it might mean you have to struggle on a poverty level Social Security benefit. It might be difficult to draw the line, but if you don’t take care of yourself now, no one else is going to.
5. Don’t buy before you live there. We hear this so often – “If I had just lived there for a while I would have realized….” Sure it’s easy to get caught up in the excitement of a community that seems to meet your every need and desire. But once the reality of living there comes, it might be too late to realize that it’s too far to drive for a quart of milk, that your neighbors have political views very different from yours, that the nearest town doesn’t have the amenities you wish it had, or that the medical resources are scant and far away. It can be difficult, but not impossible to live in a place before you buy. But if you can’t, make multiple visits, read local newspapers online, interview your neighbors and friend who might live there already, and at least take a “Stay and Play” package. Otherwise it is just too risky.
6. Don’t neglect your health. You’ve heard the expression, if you don’t have your health you don’t have anything. Sometimes it takes a bad accident or sudden heart attack to realize that. But your retirement dreams can go out the window in a second with the diagnosis of a life-threatening illness, or a medical condition that proscribes the activities you want to do. Not to mention the extra expense and hassle that dealing with the condition entails. So for goodness sake, protect your health. Go to the doctor and get the examinations and preventative tests you should. Follow a regular exercise program that your health permits. Cut down your risks: lose the extra weight, stop the smoking, keep drinking within the recommended limits. And we hope that translates into a long and happy retirement for you!
For further reading:
10 Worst Retirement Mistakes
10 Retirement Mistakes You Don’t Want to Make
Checklists for the Retiring Baby Boomer
Now You’re 65: 10 Things You Need to Know
Best and Worst Things About Retirement: A Topretirements Survey Report
Comments? What do you think is the worst mistake you can make in retirement? If you are retired, were the things you worried about before you retired the same problems you actually experienced once you did retire? Please share your experiences in the Comments section below.