I always enjoy reading Liz Pulliam West's financial columns, but this one hit nearly everything one must consider when retiring, and all in one post!
Liz covers the 5 ways to wreck retirement:
(1) Think only about the financial side. Certainly saving for retirement is a preoccupation of mine, but Liz is right--it is important to consider one's health, one's relationships with friends and family, and the hobbies or activities one wants to continue or newly develop in retirment. It would be a shame if I finally get to my retirement with sufficient money but lack the health or brain cells to enjoy it.
(2) Fail to get a second opinion. Mea Culpa! Before I get to retirement, I have to remind myself to set a date with a fee-based financial planner. I'm pretty sure I'll do this. BUT will I follow the advice I'm given? For someone who has never been good with numbers, I still trust myself to manage my finances--I need to consider that this may NOT be a good thing.
(3) Fail to understand Social Security spousal benefits. OK, not everything Liz says is relevant to Grace! No spouse, no issue for me here.
(4) Skip formulating a Plan B. Hard as it is to imagine, I agree that one must have a back-up plan for contingencies. Can I count on my health being stable? I've already had major heart surgery--what if I need more? What if my job goes away? It could happen since I work for a non-profit that is dependent upon public funding. What if the need to provide a home for my grandchildren requires that I cut back on my work hours, and therefore my earnings? Too many possibilities to be safely ignored. And
(5) Gut your nest egg early on. This is a warning that too many failed to heed in the first days of our recession. My plan is to try to maintain my lifestyle on what I get from Social Security--something that may be doable when I get my home paid off and erase all of my debts. That way, my 401(k) withdrawals will be largely for the extras like travel. But I also have to realize that it is in the earliest days of my retirement that I will be most likely to travel or pursue more expensive activities. So, at the exact time I should NOT be withdrawing funds, I'm going to want to. Definitely something to think about.