Retirement Reality
“Experience is the best teacher, but it’s better to learn from the experience of others.”
How can you truly live your best life once you retire?
And how much happier will you really be?
Most of us have big dreams for retirement. We picture ourselves much happier, with endless free time for travel, relaxation, and just enjoying life.
But a study of over 2,000 retirees and pre-retirees shows that reality doesn't always match those high hopes. In fact, many retirees look back and wish they'd planned things differently, that they'd known more upfront. They regret just "winging it" and learning some of retirement's tougher lessons the hard way.
Here's why, with a look at some surprising insights most retirees wish they'd grasped sooner.
Don't Raid Your 401(k)
Dipping into your retirement savings might not seem like a huge deal, especially if retirement is still far off. But that's not how today's retirees see it.
If you can't pay those funds back quickly—and if you're not planning to make extra contributions later—you're essentially shortchanging your future retired self, who won't have your current income. You might also be giving up employer contributions. All of this means less financial support in retirement, which can really add to future stress.
Action Step: Treat your retirement savings as "off-limits" during your working years. Only consider borrowing from it as an absolute last resort, and always have a solid plan to catch up as soon as possible.
Create a New Routine
Retirement can seem like a free-for-all, without any structure or schedule. And while that sounds appealing to many of us, it's not always the best way to transition into retired life.
Without the structure and social interaction of work, too much free time can quickly become a bad thing, leading to extreme boredom and loneliness.
Action Step: Start thinking about a new routine, how you want to spend your days, and a loose structure for your daily life. Having a new routine to fall back on can make the shift from work life to retired life much smoother.
Get to Know Your Retirement Spot
Where do you picture yourself living in retirement? What sounds great on paper might not be the reality, especially if you're thinking of moving somewhere completely new.
Local taxes, limited healthcare options, and even seasonal changes can catch you off guard. The same goes for being further away from loved ones and other factors you wouldn't know without spending significant time there.
Action Step: If you're planning to retire somewhere new, schedule an extended visit. This will give you a much better feel for the area and help you decide if it's truly the right fit for your retirement.
Pay Off Credit Card Debt Before Retiring
Credit cards typically come with high interest rates. Carrying that expensive debt into retirement won't set you up for an easy life.
Retirees usually live on fixed incomes. The fewer expenses eating into that income, the more you have to enjoy each month. So, if you retire with credit card debt, you're essentially burdening yourself with extra financial stress in retirement.
Action Step: Make a plan to pay down all your credit card debt before you retire. Crunch the numbers to see which debt is costing you the most (based on balance and interest rate) and focus on paying off your most expensive debts first.
Keep Your Plans Flexible
No matter how much you plan now, life can change in an instant. When that happens, plans you've spent years making might no longer serve your needs.
Growing families, evolving health, and so much more can make today's plans less than ideal tomorrow. If you build some flexibility into your retirement plans, you'll have an easier time adjusting and making key shifts.
Action Step: Always consider contingency plans, how your health might change over time, and how your desires can evolve. Make it a point to bake some flexibility into your plans and revisit them regularly, so you can update them whenever needed.
Action Items
Which of these retirement lessons was a real surprise to you? Which one has you rethinking your current plans or strategies?
However you answer those questions, the truth is, it's easy to get lost in romantic ideas about retired life. We can all get caught up in the fantasy of never working again and doing whatever we want, day in and day out.
As exciting as that sounds, it won't actually get you closer to the life you truly want in retirement. It also won't give you a smooth transition into retired life or any lasting peace of mind about what's next.
So, what can help?
A deeper understanding of retirement, your finances, and your goals is an excellent starting point. And when it comes to financial independence, the wisdom of today's retirees offers a priceless glimpse into what your future could look like—especially if you're not fully up to speed on some of retirement's finer details.
That wisdom can also help us adjust our expectations and take off any rose-colored glasses that might be getting in the way of smart retirement planning. Beyond that, regularly reviewing your financial plan can really help. And so can the support and guidance of people you trust.
~Alex
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