(photo from idahostatesman.com)
I live in Boise, and have for the past 27+ years. Many of the locals have lived here their entire life, and many are new transplants, as I once was. What we all have (or will have) in common is the desire to have a pleasant retirement. Having talked with many retirees and those planning to retire, I distilled their "mistakes" into the following.
Don't Make These Mistakes
As with many things in life, there is not always a single right or wrong answer to everything. You might know someone who did what I call a mistake, but that it was the best thing they could have ever done. Good for them. Remember, I am talking in generalizations here and also just from general observations. I have not performed any scientific studies; these are just from things that I have seen people do once they have gotten close to retirement, or they have done them after they retired. One last note: Even if you decide to knowingly do one of the following items, at least you will be more prepared for some of the possible results – knowledge can be a powerful tool.
Many readers make a usually accurate assumption that items near the top of a listing are more important than the items farther down the list. This is one time when that thinking is erroneous. Because I have not done any scientific studies as to the frequency of occurrence or the resulting financial impact, I would be doing you a disservice by saying that any one of these is more important – or more detrimental – to you than any of the others.
(photo by Damon on Road on Unsplash)
Buy an RV but had never been RV’ing before
I would love to know how many millions of dollars are spent by new retirees each year on brand new motor homes and other recreational vehicles (pull-along trailers, fifth-wheel trailers, etc.). They are fun to look at, and the appeal of being the first owner hooks many first-time purchasers. The first paragraph on the home page of a major RV dealer starts, “Nothing compares with the freedom and exhilaration of the [name of the RV dealership] experience. Once you’re behind the wheel, the open road is your passport to destinations you could have only imagined.” So how can it be a mistake if they tell you that buying an RV gets you freedom, exhilaration, and the ability to go anywhere you want? Oh, that’s right – they are the ones who want to sell you that RV.
I think that owning a recreational vehicle can be a fantastic experience that does provide all those things that the dealership says it will. But here is where I think it is a mistake. Notice that the title of this section says that it is a mistake for retirees to buy an RV when they had not been RV’ing before. How do they know that they are going to like this new way of travel and living when they have not previously experienced it? My wife and I have talked many times that one of the things we wanted to do when we retired was to travel in an RV around the country. The only RV that we have ever traveled “in” is a small pop-up trailer. It was a very good trailer, and we used it extensively when our children we smaller – we visited all the National Parks in the western United States. It wasn’t always the ideal situation (putting it up and talking it down during the pouring rain at Mt. Rainier was not fun). We recently sold that pop-up that we bought in 1990; someone else gets to enjoy it now.
But the key point is that I am not about to go buying an motor home or a larger trailer without having rented one to try it out first. If you think you want to have a motor home, then you must rent one to see if that style of traveling and living is something that you can enjoy for an extended period of time. Rent one for a 4-day weekend or for a week vacation. There are plenty of places to do that in Boise. If you like it, then rent one for a longer vacation- such as two weeks or more. Just don’t run out and buy one without having tried it first. You might be able to afford it, even paying cash for it. But this is a serious commitment of time and money that you do not want to jump headfirst into without first sampling it. If you don’t believe me – do this and then write me to tell me I am wrong. Go visit some of the larger RV dealerships in your area. Ask them if they have any RV’s that are less than one year old with less than 10,000 miles on them. See how many they have, and then ask them what the situations were with them. Why do they have them back for sale after such a short period of time?
(photo by Glenn Carstens-Peters on Unsplash)
Don’t have a written plan of things to do and places to go
It could be an easy temptation to enter retirement with the motto of “I’ll do whatever I want to do.” After many years of hard work and dedication, the thought of not having to do anything according to a schedule has a certain appeal that is easy to want. The only problem with this philosophy is that it then becomes too easy to fall into the trap of not really doing the things that you have always said you wanted to do when you retired. That would be a shame.
I feel that it is critical to have a list of “what you want to do and where you want to go” in retirement so that you can accomplish those goals that you made many years ago. There is nothing wrong with taking some time off and “doing nothing,” but you would not be reading this book if that is how you wanted to spend your whole retirement. When you are making your list, don’t get bogged down by practicality or current financial feasibility; if it is something you want to do or somewhere you want to go, it should be on your list. Look at your list frequently. Has something new surfaced that should be on the list? Have any priorities changed? Has your health changed so you should drop something from the list, or something should be moved up so you can do it “while you can”? Even though it is on your “wish/want list,” you most likely will not accomplish all of them. That’s okay; you probably still accomplished more of your retirement activities goals than people who don’t have theirs written down.
(photo by author)
Think their money will last forever
This will be an extremely short section because I have told you that I am not a financial consultant or advisor. You should work with your financial consultant(s) to make sure that your financial situation meets your current and future needs. There, is that short enough?
Don’t spend any money for fear that it won’t last long enough
This is almost the exact opposite of the previous paragraph. These retirees heard many times from their parents (or grandparents) how tough it was during the Great Depression, and they do not want to be in that same situation. Many of these people have hundreds of thousands of dollars, even millions of dollars in assets, but they also feel that they can never have too much money. It is not like they are trying to amass large amounts of wealth to live well, travel frequently, and share with others. They still live a modest life and do very little in retirement that will do anything to draw down on their savings.
I have always felt that Americans as a whole do not save enough money. The ironic thing is that we are taxed on the earnings of our savings, yet we receive a tax break for certain expenditures. That sure sounds like a backwards incentive program to me. But I am not an economist. There is nothing wrong with savings, and there is nothing wrong with making sure that your savings do last for as long as you want them to (including passing money on to heirs and charitable organizations). Once again, here is why it is critical to work with a financial consultant (or possibly more than one) to make sure that your money will last the right amount of time for you.
(photo by Duy Pham on Unsplash)
Expect to be able to do the same things with their non-retired friends
I have seen this same phenomenon occur when couples have their first child. The friends with whom they used to do things all of a sudden become not as available to them. Why? Because their friends have no children and that used to be one of the bonds that allowed them to do things together. But that similarity changes now that the one couple has a child. The couple with the child now begins to have more in common with other couples with children. They will attend the same birthday parties; they will swap children for a date night without children; they will eventually attend the same school functions and just spend more time together. It is not that they no longer like their friends who have no children; this new addition to their life changes the dynamics of the people that they tend to gravitate to. That happens whether yuo live in Boise, Billings, Bozeman, or Baton Rouge.
It is quite natural for people to want to maintain the same pattern of activities with their acquaintances. After all, these are the people we have spent time with, gone to dinner with, and we might have even traveled with them. But there is a change now, and it is you (the retiree) who is the one who has changed. You now have more time to do things along with the freedom of picking when you want to do them. The only problem is that your non-retired friends still have their regular schedules that they must adhere to (working and other work-related obligations; limited vacation and possibly even strict vacation times, etc.). You will try to do a few things with them, but you will eventually find out that you are slowly moving apart from them. Both of you will attempt to maintain the relationship; but just as a garden requires care and cultivation or it will go to seed and be overrun with weeds, you will have to work even harder to keep that relationship the same.
Just because the relationships with your friends are going to change doesn’t mean that you will never see them; just less frequently. The positive to all of this is that you will gradually develop an additional set of friends who were previously no more than mild acquaintances – other retirees. Cultivate these new relationships and you will soon find yourself learning and doing new things with them.
Expect huge changes to happen automatically
Even though retirement is typically triggered by a specific activity (actually retiring) on a specific date (your actual retirement date), I consider “retirement” to be more of a state of mind than a statement of your working situation. And once you start retiring 10 years’ in advance, your retirement will gradually ramp up rather than just instantaneously jumping out at you. Just as we don’t notice how our own children are growing because we see them every day, their aunts and uncles are amazed when they haven’t seen them for a year or two. “My, how you have grown,” is a typical reaction.
This is also how your retirement happens. Because you are working on it for five to ten years, it just gradually happens. Thus, you are not going to see or feel any revolutionary changes, and this is actually a very good thing. The people who do see significant changes in their lives are the ones who have not started retiring as you are going to do. They retire on a Friday afternoon, and they get up on Monday morning and find out that their entire world changed over the weekend. This is not healthy for the new retiree or for the family. Studies have shown that these retirees have a significantly shorter life span after retirement than those who phase into retirement and the changes that come along with retirement.
One of the MANY good things about living in Boise is that there are plenty of professionals who canhelp you as you plan for, and head into, retirement.
Good luck -- Bon Voyage!!!