Four Common Unpleasant Retirement Surprises and How to Avoid Them
by www.SixWise.com
By the year 2020, most Baby Boomers will have reached age
60 or older and will be thinking about retirement (if they
haven't retired already). Some have been "planning"
for their retirement for years or even decades. Others perhaps
got a later start, but the expected ideal outcome is usually
the same: retirement is a time when you finally get to relax
and reap the rewards you've earned from all those years hard
at work.
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Be honest about your expenses after you retire. If
you plan to take up an expensive hobby or do a lot of
traveling, you'll need more money than if you plan to
spend your time visiting family and friends.
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Retirement should indeed be a time to indulge yourself, explore
your hobbies and the live the life you've always wanted. In
reality, though, many people are hit with some rather unpleasant
surprises that threaten to rain on their retirement parade.
So if you are planning to retire soon (or ever, for that
matter), please take the following information to heart. There's
still time to avoid these all-too-common retirement surprises
that you're much better off without.
1. Underestimating Your Expenses
Most experts recommend estimating your expenses in retirement
to be about 70 percent of your expenses while you're working
(and you can expect them to decrease 1 percent each year).
However, nowadays many people are putting off travel and
other luxury purchases until their golden years, and some
retirees may also be faced with the unexpected cost of caring
for their own aging parents. The bottom line? You could very
well need to up your level of expenses.
"Lots of people put off major trips and other major
expenses until they're retired," says Ted Rechtshaffen,
the president and CEO of TriDelta Financial Partners. "And
some people, depending on health and age, spend more in the
first few years of retirement than they did while they were
working."
The solution? When planning your retirement strategy, be
honest about how you expect your lifestyle to be. If you want
to travel or splurge on your grandkids, you'll need to
have a lot more stashed away than if you plan to spend your
days working outside in your garden.
2. Not Anticipating Higher Medical Costs
Medical care costs are one of the biggest shocks to people
going into retirement, according to Olivia Mitchell, head
of the Pension Research Council at the Wharton School of Business,
in a Money Magazine article.
Along with the rising costs of medical care, many new retirees
would rather not think of potential health problems down the
road, and may not adequately cover themselves insurance wise.
The solution? Make sure you have adequate savings to cover
any medical situations, and consider special insurance coverage,
such as long-term care insurance or critical illness insurance,
to cover short- and long-term medical costs.
3. Losing Contact with Friends and Social Circles
When planning for retirement, many people focus solely on
the financial aspects. However, you also need to plan for
your mental and emotional health, which means ensuring you'll
have activities to be involved in and people to surround yourself
with. This is incredibly important because, all too often,
retirees find themselves socially isolated, alone and at risk
of depression.
"Depression is actually a big issue," says Jodi
L. Salamino, a licensed professional counselor in Michigan.
"A lot of times, with the loss of identity and structure,
the change actually turned into a negative one."
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Upon retirement, you and your spouse will be spending
a lot more time together. Be sure to respect each other's
needs (for togetherness, alone time or time out with
friends) while remembering to show one another how much
you still care.
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The Solution? "Unretire" yourself by getting a
fun part-time job (if you've always wanted to sell ice cream
at the zoo, now's the time!) or volunteering. You can also
take a class (Yoga? Art? Woodworking?) or join a club in your
area; whatever appeals to you that will get you to stay out
there in social circles and be active.
4. Becoming Inactive/Decline in Fitness Level
As you no longer have some place you have to be everyday,
it may be tempting to sleep in, lounge on the couch or spend
the day in your pajamas. Now, there's certainly a time and
a place for all of these things, but some retirees run the
risk of becoming overly sedentary and inactive.
This, of course, sets yourself up for health problems and
a decline in your fitness level due to inactivity and emotional
problems due to the potential isolation. Even just the inevitable
change of not going to work everyday can have a noticeable
impact on your fitness level.
The Solution? Stay active by keeping to your exercise program.
Even better, expand on it by joining a group aerobics class
or finding a like-minded neighbor to take a daily walk with.
5. Not Accounting for Changes in Your Marriage
When one or both partners in a marriage retire, they can
expect to be spending a lot more time together. For some couples
this is ideal, but for others it can become a breeding ground
for conflict.
"Wives at home don't always deal with their husband's
retirement well and neither of them take into consideration
they'll be together more," Salamino says. "It's
important to maintain some independence apart from each other
to keep the spontaneity alive."
The Solution? Be sure to keep communication lines with your
spouse open. Talk about how your needs have changed, encourage
each other's interests and desires, and respect your partner's
(and your own) need for alone time. Meanwhile, take the time
to show
your spouse that you still care.
Recommended Reading
The
6 Common Mistakes Doctors Make When Treating Older Patients
-- and How to Prevent Them
401(k)s:
8 Key Tactics You Need to Know to Get Full Benefit from Your
401(k)
Sources
National
Review of Medicine February 28, 2007
Traverse
City Record Eagle February 25, 2007
Money Magazine, March 2007, "Scholar of the Boomers'
Future"