When you think about retirement, the planning stages seem to be pretty obvious and simple. You work all the years you want or need to, save some of your money, invest it wisely, and then at some point in time, you retire. Now after you do, life is easy, right? You might think so, but before you get surprised, let me give you some retirement warnings.
Retirement should mean no more waking up at dawn, fighting the morning traffic, and dealing with a boss who you almost never agree with but have to deal with every day. Now you get to call the shots and enjoy life on your terms…finally! The plan seems perfect: work until about age 65 and then enjoy the good life of golfing, travel, gardening, and/or being a grandparent.
That’s the plan, or is it actually a fantasy? While this retirement is what you may be looking forward to, you could be in for some big surprises ahead. Several important facts about retirement are not being discussed out loud and no one really talks about them. That’s why I have added 5 retirement warnings that you need to know!
5 Warnings About the Softer Side of Retirement
Warning #1 – Who Are You?
Your identity becomes wrapped up in what you do for a living. Some have said that “you are what you eat” years ago (in 1826, the French lawyer Anthelme Brillat-Savarin wrote a version of this about the notion that to be fit and healthy you need to eat good food), but I am here to tell you that most of us are actually “what we do”.
If you are an accountant or a policeman or a carpenter or a lawyer, that is what and who you are and no matter what you do after you retire, you will always be that. Even when you try not to be. A lifetime of doing something doesn’t go away overnight or even after 5, 10, or 20 years.
My years in retail have never left me and I mean even more so than just writing about it here. I still notice everything about the business when I shop and I still get asked the same questions about it all from all of my friends and relatives just like I did when I worked at it every day. It’s just as if they haven’t stopped connecting the dots between then and now when it comes to me and my old job. And frankly neither have I. I may have loosened the connections a bit, but the rest of my world hasn’t and may never do it. Get used to it.
Warning #2 – Take a Chill Pill, Please
When a career ends and the routines that have been practiced end, depression can become a big issue. Reports show that retirement actually increases the risk of clinical depression. Why?
The two main contributors to depression are social isolation and inactivity. That’s why so many experts on the mental health aspects of retirement recommend coming up with a plan for retirement that goes way beyond your finances. Unless there is something else to fill that space, depression may be unavoidable.
It’s a fact that people just don’t like to talk about depression, so it is no surprise that it is one of the things that no one tells you about retirement. When you retire, what will motivate you to get out of bed and do something every morning?
I fell into that depressed state myself early on, never thinking that not getting up and doing what I had been doing every day for decades would actually be missed. I thought the same as most people and that was that sleeping late and enjoying my free time was all I ever would need and want. Seeing that wasn’t working for me is one big reason I decided to start writing this blog.
There are many who say you need a “second act” in life after retirement. I agree. It may not be for the same reasons as your first act when you needed it to sustain you and possibly grow a family and keep a roof overhead. This one is more for keeping your sanity and giving you some kind of purpose every day. Warding off depression may be a real necessity. What else wards off feelings of disconnect and depression?
Warning #3 – Stay Healthy Now
Remaining active as you age helps your physical health and your mental well-being. I knew that, just like you already know that. The difference is doing it and that’s where I and so many others have failed over the years.
It has been attributed to many over time, but I recall that it was Mickey Mantle, the iconic NY Yankee baseball slugger who once said, “If I had known I would live this long I would have taken better care of myself”. He was right. When you retire, make it to an actual “something” and not to “nothing”.
Routines help and are actually healthy for you. Get up at the same time each day and develop a routine. Retirees fare better when they have a plan for the day, even if it’s just meeting up with friends or hitting a few balls at the driving range.
What about being a volunteer? Seniors who volunteer have a greater feeling of mental well-being than those who don’t. Our local food bank is always seeking volunteers to help and not only do you get that cool feeling from it, you always make new friends when you do.
Stimulate your mind. Retirement doesn’t have to be all leisure. Some of the happiest retirees continue working a reduced schedule and work part time or even pursue a higher education. You may not even have to pay and can audit classes as a senior in many schools.
Warning #4 – Can Retirement Cause Divorce?
A study from the Pew Research Center found that the divorce rates for Americans who are age 50 or older has roughly doubled since the 1990s. Why is that?
One of the reasons for the increase in divorce among retirees may be that we’re just living longer. When you reach retirement age, you may still have decades of life ahead of you. If you haven’t had a great marriage until then, why would you stay in one now that you have even more time to spend at home than ever before?
Second, you have probably noticed that there isn’t the same stigma surrounding divorce (both from a religious and a societal perspective). People are less likely to stay in a marriage they no longer find fulfilling now that that’s occurred. Almost everyone I know has had a divorce…is it my choice of friends?
But a word of caution still must be said when it comes to retirement and divorce. Financial security can be blown up when divorce comes into a retiree’s life. In some cases, the later a woman divorces, the more likely she is to need to continue working full time, even in retirement. Suddenly, the nest egg that you thought was sufficient to support a comfortable retirement doesn’t stretch far enough because it needs to support two separate households.
That’s why if there is a chance that a break-up could possibly be in your future, look hard at what that might do to improve your marriage—or at the very least your finances—before that becomes a reality.
Warning #5 – Yes, You Can Run Out of Money!
Traditional retirement planning recommends aiming for 80% of your pre-retirement income each year to maintain your quality of living in retirement. The thinking is that once you retire, certain expenses, including housing costs, commuting, dining out, payroll taxes, and retirement savings will decrease. They will.
But some households end up spending more than what they’ve budgeted for, especially early in retirement. Why is that?
The overspending is not typically on necessities such as food and healthcare, but on discretionary spending, such as travel and a biggie, maintaining a more expensive home than they really need. Downsizing isn’t a “weight loss” program.
Yes, it’s understandable that after a lifetime of working, new retirees may want to treat themselves a bit and that happens in almost every case. However, if it continues, overspending in retirement can significantly increase your chances of not having enough money to last the rest of your lifetime.
Even the best-laid retirement plans can come unraveled if you aren’t proactive about setting a reasonable budget for retirement spending and sticking to it. And the more detailed the better.
Worse news is this: If you never used a budget during your working years and managed to scrape on by because your income was sufficient, that will not be the case in retirement. They call it a fixed income for a good reason.
That’s why it’s important to find alternate sources of income before your retire and use that as a buffer for the temptations of unplanned spending that you will certainly face in retirement.
I don’t want to frighten you about your retirement and what it may be like. Your retirement is something to look forward to and if you do the right things it can and will all work out for you and your family. It even works out when you don’t do everything perfectly, because no one can do that and it’s not being realistic. My warning is this: Try to do more right that you do wrong and don’t wait until retirement day to start.
Financial planning for retirement is essential, but so is planning for the aspects of retirement that money can’t buy like social connections, a sense of purpose, your good health, and passions beyond your career. Heed my retirement warnings and make a plan to avoid those problems.
As you get nearer to retirement age, start focusing on how you’ll use your new-found flexibility and freedom. You will encounter a few unexpected twists along the way, but the more you plan for the softer side of retirement, the better prepared you’ll be to confront those inevitable bumps in the road. We all have them.
Retirement: Does it call you or frighten you? Are you planning to retire at age 40 or 70 or never? How much have you thought about the softer side of your retirement plan?