Thursday, October 21, 2010

Roadblocks to a Successful Retirement

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.


LoveBeingRetired said...

Having a Plan B makes great sense. As you say, things may not go the way you expect which is more often than not the case. If a major event impacts your retirement life, will you be able to cope, financially as well as emotionally? We all want to retire to doing what we want to do but sometimes are forced to do what life intends for us to do first.

Janette said...

If your ex dies before you - then you may get survivor's benefits!

I gave up on financial planners long ago. I felt like I was paying someone to tell me to save. It didn't work in weight loss- why would it work in saving.

You have tweaked me on the idea of that nest egg being spent. Since the most of our fun time together will be in the next ten years- it doesn't make as much sense to save like crazy for later- when I can live off of Social Security. I might think more about this myself!