3 Retirement Misconceptions

Each of us has his or her particular vision of how we hope retirement will play out. Some look forward to an active life doing those things they never had time for while mired in the working world. Action and adventure will be the topic of the day. Others may wish to pursue a slower pace enjoying each day for what it has to offer without feeling the need to pack calendars with activities. Whatever your personal preference it is important to look ahead to plan and prepare. Good things do not automatically happen just because you roll into retired life.

We look forward to living and pursuing a second act doing what we genuinely enjoy. We have earned it. This is our time. And hopefully we can each do just that. But it never hurts to be a little cautious. It is better to go into retirement with eyes wide open rather than simply optimistically hoping for the best. As you navigate your retirement here are a few gottchas to watch for:

I have worked all my life and I can’t wait to do nothing in retirement

Your retirement should be a time for you to turn things down a notch and take it easy. You have earned it. For many the initial honeymoon period – that first 6-12 months right after you retire – is a wonderful time. No more getting up early to battle the traffic. Goodbye stressful meetings and busy airports. Say hello to sleeping in a bit and starting your day slowly, at a pace that suits you. Doing nothing – “watching the grass grow” as my dad would say – feels darn good. But then a funny thing can happen.
Instead of feeling excited about the new day you find yourself becoming a little bored. Those fun distractions that initially brought a smile to your face start to feel a bit old. Doing nothing turns out to not be all you had expected.

It is valuable for those nearing retirement to take an honest look at how they will spend their days once the job is no more. How will you keep busy and engaged in meaningful activities? What will those activities be and do you have enough of them? Finding yourself retired and bored can be a terrible thing. Better to put those creative powers to use today before you arrive at retirement’s doorstep to build your list of passions, hobbies and worthwhile pursuits. You have the power to make each day memorable or at the very least not boring. You can always make time to do nothing. But don’t fool yourself into thinking that just because you have made it to retirement your job is done. It takes effort to live a fulfilling retired life.

I will never have enough money to retire

In order to live a safe and sane retirement we need to have sufficient savings or some continuing source of income to pay the bills. How much you need depends a lot on the lifestyle you live. Once retired some expenses will reduce or go away – education for the children, mortgage payments if you have been fortunate enough to pay off your home, and gas bills to fill the cars for the work commute. Other aspects of life will become more expensive such as healthcare. Each of us should look closely at the way we hope to live our retirement and compare it to the income we expect to have. You may have to make adjustments. Some choose to make a trial run living as if retired to see just how accurate their estimates are. Others wait until they can wait no longer due to failing health or changing job circumstances.

My fear is if you wait too long you may miss out on those younger years when you can still do it all (almost). When you first retire at say 65, the options for what you can try and experiment with are broader than when you get to 75. Hopefully you are still healthy enough to get out there and play. That is not to say just because you are 75 it is too late. But the reality of aging is what it is. It is easier to do some things while you are younger. If you worry about having enough money to cover every contingency you will probably never retire. The cost of that additional financial security may require you missing out on experiences you will never be able to recoup.

I will be bored if I don’t work

This can be a tough one. Numerous studies show a majority of seniors would choose to work in some capacity after retirement. The biggest reason is to maintain the social interaction that comes with a job. When we retire we not only leave behind our career but also all of those who along the way became part of our lives. Some make the effort to maintain relationships after retiring but it is not easy. That common ground provided by sharing a workplace is gone and sometimes there is nothing commensurate to take its place. And then there are those who genuinely enjoy what they are doing so leaving the job can be seen as a negative.

I have found the absence of a job a good thing in my retirement. That incredible stress and constant pressure to perform is replaced with a slower paced day to day existence. I get to decide what I want to do when I want. I can explore interests I may have been forced to abandon since I now control the clock. I am looking into volunteering in the community as well as investigating local organizations in such areas as gardening and wine appreciation. I rarely find myself bored, but I have only been at it for three years now. Still, short of needing to go back to work for the money I am quite happy far, far away from the work scene. Who has time to be bored?  :)

4 Essential Retirement Planning Questions

Everyone understands the value of careful financial planning prior to making the move into retirement. But it is equally important to plan for the daily life you will live as a retiree. An effective retirement plan addresses both the financial and the lifestyle side of retiring. These four questions will help you finalize your retirement plans.

How much will you need to live the retirement lifestyle you want? Many of us have a vivid picture of the life we hope to live in retirement. There are things we want to do and places we want to go. Most of us hope to experience and take advantage of our well-deserved status as free-wheeling retirees. A fulfilling retirement should allow us to pay our bills as well as enjoy the pursuit of our passions and dreams.

How much you must save to allow you to do the things you want is based upon the retirement lifestyle you envision. A good plan should include an element of frugality along with plenty of common sense. But we do not want to miss out on things we have always wanted to do now that we finally have time to enjoy ourselves. I find it helpful to think in terms of having paid my dues and earned the freedom to do what I really want. Sometimes I have to do without one thing to subsidize another. And don’t overlook the fact that you could enjoy 20 or 30 years of retired living. Both your time and money need to be budgeted for the long term.

At what age do you hope to retire? Not everyone is able to retire at age 65. Some of us wish to continue working while others may be forced to retire early due to a job loss or health issues. But if you can decide, when would you start your second act? You don’t want to delay retirement so long that you find yourself too old to enjoy the things you planned for. And you don’t want to retire prematurely without sufficient savings to fund your future. The age you decide to retire will significantly impact your financial situation. You will also need to determine when to start receiving Social Security benefits and begin to tap into IRA and 401(k) plans, all of which will factor into your retirement budget. It is a complex decision with lots of moving parts that should not be taken lightly.

If you are married, you also need to factor in your partner’s retirement timing. Chances are slim that you will both retire on the same day. Differences in ages can make it financially beneficial for one of you to keep working. A partner who retires earlier can test the waters to get a better understanding of what retirement truly entails. Their firsthand experience may smooth the transition when the time comes for their spouse to join them.

How will you make each day interesting? If you roll into retirement unprepared to make the most of your free time you could run out of things to keep you engaged. You have to know what you are going to do once you retire. After saving for so long, no one wants to find themselves bored in retirement.

Now that I am retired, I am learning what it takes to keep each day interesting. To occupy myself I need a variety of things to do, including hobbies, passions and new adventures. I have also discovered that if I do not keep myself mentally active I begin to slow down. I need challenges and new situations to keep myself engaged. I try to dedicate a part of each day to physical activity to encourage good health. I have a routine of daily exercise and walking, blogging and writing, online history classes, an iPhone app to learn French, my newly discovered interest in cooking, reading, playing the piano and gardening. My wife entertains a passion for jigsaw puzzles, yoga and Sudoku. And we typically converge at some point in the day for a heated round of backgammon, Scrabble or gin rummy. It is important to keep adding activities, and we are always on the lookout for new avenues to explore.

Will work be part of your retirement? Not everyone is happiest away from work. Some people get a kick out of the job. Co-workers provide a social tie that can be hard to replace. Achieving goals and meeting challenges can keep you feeling alive and important. Unfortunately, not everyone has the option to keep working as companies change direction or hire younger employees eager to be promoted. Retirement can be the chance to try your hand at running your own business, especially if you have always dreamed of taking a shot at becoming an entrepreneur. Even if you are not working full time, some part of your day dedicated to a regular job could make you happier in retirement.

When it comes to planning for your retirement, the important thing is to get started. Don’t wait until you arrive to begin planning how you will spend your time. Deciding what you will do before retirement gives you the opportunity to test things out and make changes so that all you need to do is fine tune during your retirement years.

Written for US World & News