There are some common mistakes that you need to avoid in your first few years of retirement. Investments, what you are spending and your health seem to top the list for most people in their first three years of retirement.
Brian Vnak writes, when you have finally arrived at the stoop of retirement, your next steps are often some of the trickiest. So much time and effort goes into reaching this milestone that what you do next is often ignored. Not intentionally, it just happens.
While the day-to-day of the next stage of your life may be unknown, what not to do is actually quite clear: Don't invest too conservatively, don't overspend and don't neglect your health. Seems like common sense, but it's not as easy as you might think. Let's explore.
Three common retirement mistakes
Investing too conservatively
Expanding life spans are good. Who doesn't want more time to enjoy life's pleasures? But from a financial perspective, increased longevity can be challenging. Living for 30 to 40 years beyond a retirement date increases the possibility of outliving your savings. Despite this concern, many new retirees prioritize reducing volatility by loading up on cash and bonds while ignoring the very real possibility of living longer than they expect.
While it's true that cash and fixed income investments are less volatile, it's unlikely they will produce the returns possible by stocks in the current, low-interest-rate environment.
It is a major milestone in anyone's life: retirement. You spend so many hours dreaming about just what you will do with the time, that when it happens, you often aren't prepared for the reality of it. Retirement is not always the answer to the unfulfilled life that many expect it to be and some even struggle with the new way of life.
Spending too much
Retirement is about enjoying the financial freedom to do as you please. This flexibility can quickly evaporate, however, if you become too indulgent and/or bored. I've seen plenty of retirees fall victim to the siren songs of consumption in their golden years. For some, it's involved binge spending to acquire the things you've denied yourself during your working career. For others, it's the costs associated with owning a second home or relocating to a new warmer state and community and "keeping up with the Joneses."
Some people also enter retirement without a purposeful plan for their freedom. In this case, 24 hours in a day can seem like an eternity. That's a lot of "free time" where boredom and sometimes depression can ensue. To combat this issue, it's only natural to make yourself busy, but the undisciplined pursuit of purpose can inadvertently become expensive.
In your early years of retirement, it can be a tough time limiting spending and sticking to a budget in? This can be a common retirement mistake. Here are a few very simple, yet highly effective questions to ask yourself before you buy something that will help you spend smarter, save money, and stick to your budget.
Neglecting your health
The older you get, the harder it is to maintain good physical health. And the harder it is to stay in shape, the more susceptible your body becomes to ailments, both physical and mental. Illness and prolonged rehabilitation can quickly dry up the joy of retirement — not to mention the joy of paying all the related medical bills.
The loss of one's routine can significantly impact life in retirement. It's very easy for a person's daily exercise ritual to turn into a daily happy hour ritual. It's 4pm somewhere, right? Without a sense of routine, it's difficult to remain disciplined. Exercise and a healthy diet are easier to maintain inside of a routine.
An important strategy to implement during your first three years of retirement is to prioritize focusing on your health before your wealth. Your wealth decisions will mean nothing if your health prohibits you from enjoying it. For some people, this might mean starting retirement with a hobby or alternative occupation that helps preserve your routine. Just be mindful that your new routine is in alignment with your spending plan. Participating in activities that are free (or nearly free) that also focus on your health is a great way to achieve both objectives. After all, what does a walk in the park with a friend, harvesting a garden patch or making dinner for loved ones really cost? That's a good return on life for a small price.
Neglecting your health when falling out of a routine is a common retirement mistake. Don't you wish that you could be as fit and healthy as you were when you were in your 20's? You can, take some advice from one of the fittest men over 70 on the planet, make these habits apart of who you are and you will be inspired and less likely to neglect your health
If you are approaching or in the early years of retirement, joyful times are ahead but they certainly aren't worry-free. This can be a difficult time for some, but also an opportunity to carry on with your successful routine that got you this far. For more advice on health, finance and your consolidation year, sign up for our news letter, or join The Life Habit community today.
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