Editor’s Note: Many of us approach retirement with vague plans and fuzzy financial aspirations. We’re distracted by busy day-to-day responsibilities: aging parents, nearly-adult kids and jobs that we either love or find increasingly frusrating. I haven’t met many people who fall in the middle on the career front, especially as retirement looms. It’s no wonder that many of us stumble into retirement without a career picture of how it will look. After all, no one’s financial or personal situation is the same, and retirement fits differently on everyone.
Retirement can be great, but it comes with some pitfalls, according to a recent online article from Kiplinger. Specifically, the article details retirement mistakes “You will regret forever.” That sounds quite dire, and somewhat alarmist, but the overall takeaways make sense. A few examples (with supporting details) include putting your kids first, relocating to another region or country without a trial run and borrowing from your 401k. Those three can dramatically affect your financial well-being as you transition to retirement, but all of Kiplinger’s examples are worth a look.
The topic of relocating to another state or country is especially interesting because so many people, especially from cold climates like ours, crave the warmth and sunshine of Florida and the Carolinas. The article recomments renting before buying a place, and reviewing all of the extra costs (such as flood insurance in coastal areas), to get a better picture of retirement life.
Another area the article explores is working far beyond typical retirement age. One study it cited said that 44% of people plan to retire after 65 or not at all… some because they need the money, others because they like to work. But if you plan to supplement retirement savings and Social Security with a paycheck, that plan could be derailed by health issues, layoffs or job skills that aren’t keeping up with an employer’s expectations. Your best bet is to save as much as possible and invest in the stock market (mutual funds for the broadest and safest exposure). CDs, bonds and other low-performing investments barely keep up with inflation, while the stock market has averaged 10% in gains over the past 100 years.
