So, You’re Retiring: Here Are 14 Retirement Downsides Nobody Told You About

THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE SEE MY DISCLOSURES. FOR MORE INFORMATION.

Congratulations, you’re about to embark on a new chapter in your life as you enter retirement!

After years of hard work and planning for the future, knowing you can no longer depend on a regular income or daily structure comes with anticipation and anxiety.

Although it might seem like bliss to never have to worry about heading into the office again, there are some important things to consider when transitioning away from full-time employment.

Today, we will cover 14 common retirement downsides that few people discuss before taking this big step, arming you with knowledge so that you can better prepare yourself for what lies ahead.

#1. Your Taxes May Not Go Down

We all think when we retire, our taxes will decrease.

But this is not always the case.

Some states tax Social Security income. And if you are taking money from a tax-deferred retirement plan, like a 401k or Traditional IRA, you will owe taxes on this money.

The good news is most retirees get a larger standard deduction and other tax benefits.

But don’t retire thinking taxes will be a thing of the past.

#2. Organization Is Key

Now is the ideal time to get all your ducks in a row, organize your finances, set up automatic payments for bills/loans you may still have, and ensure you have enough money to live comfortably. 

Don’t forget about taxes either, because those will now become an important part of your overall financial strategy.

#3. You Need To Buy Health Insurance

You’ve gone your entire adult life having your employer do the hard work of narrowing insurance plans down to two or three for you to choose from.

Now that you are retired, you are on your own.

While Medicare will cover most of your needs, you still need to decide on coverage options.

And Medicare does not cover long-term care, so you will have to shop for that on your own.

The best thing you can do for yourself is to find a few Medicare experts in your area, pick the most knowledgeable one, and have them help you make coverage decisions.

In addition, ensure you are doing all you can to save money on health care costs so they don’t break the bank.

#4. Your Friends Still Work

One thing no one thinks about is that often, their friends might still be working.

This is especially true for people who can retire a few years earlier than the traditional retirement age.

You might want to go to breakfast, play golf, or visit an attraction, but your friends can’t go because they are working.

The good news is many retirees make new friends who are also already retired.

But the first few months or years can be rough before you meet new people.

#5. You Wished You Saved More

Ask any retiree; most will say they wished they had saved more.

Sometimes, they run dangerously low and need to drastically cut back on their spending or find part-time work.

In other cases, they have enough money to survive, but they don’t think so, so they live in fear, reducing spending and not enjoying retirement.

As you approach retirement, don’t slow down on the amount you save.

Keep putting as much away as you can.

After all, no one ever complained they saved too much money.

#6. It Can Be Lonely

Retirement can be a lonely experience for some people too.

This is especially true for extroverts.

You are used to seeing people at work every day and making small talk.

Without a job, you encounter fewer people.

Luckily, there are ways around this.

You can find groups in your area that share your interest.

There may be a book club or a group to play golf with.

Or you might find a gardening club.

The last thing you should do is sit home alone and be miserable.

#7. Your House Will Still Cost You Money

Your largest expense is your home.

Most retirees make it a point to pay off their home before they retire to limit this expense.

But even if you are successful, your home will still cost you.

There are many ongoing maintenance costs associated with home ownership.

And don’t forget about insurance and property taxes.

Thanks to inflation and higher home sale prices, both could increase costs in the coming years.

#8. It Takes Time To Find Your Groove

Few retirees sleep in on the first day of retirement and have a great day.

After decades of waking up early and having a schedule five days a week, it can be challenging to live a new lifestyle immediately.

You will need to learn to be patient; in time, you will find a rhythm to your days and weeks.

Unfortunately, this does not include sleeping in, which most retirees will tell you won’t happen, no matter how badly you want it to.

#9. You Lose Your Identity

Many people have their identity in their careers. When they retire, they lose this, which can be challenging.

Some decide to work part-time so they don’t lose this part of themselves, while others figure out a new identity.

If you find happiness in your career, you should take steps before you retire to find other interests and hobbies so you are not lost when it comes time to retire.

#10. Taking Too Much Money Out Early Can Be Dangerous

Having your money last while retired is critical, but few people realize the impact of taking too much money out in their early retirement years.

When you do this, there is less money left in the account to compound and continue growing.

As a result, you could run out of money.

This isn’t to say you should avoid spending money, but try to put off large purchases for a few years to help ensure your money lasts for as long as you need it.

#11. You Can Still Save For Retirement

Did you know you can still save for retirement when you are retired?

You can put that money into a Roth IRA, regardless of your age, as long as you have earned income from a part-time job or a side hustle.

This is true for a Traditional IRA also, thanks to the passing of the SECURE tax law.

Another benefit of that legislation: if you are contributing to a 401k, you don’t have to take a required minimum distribution from the account until you leave your job.

#12. Splurging Is A Rare Occurrence

Retirement is about budgeting and ensuring you have enough funds to survive for the rest of your life. 

So, while it may be tempting to splurge on something, try to avoid it as much as possible. 

Sticking with a budget and living within your means will help you get through retirement in a financially sustainable way.

#13. Financial Uncertainty

You will no longer have a regular income from your job or business, so financial planning is a must if you want to make sure your money lasts through this period in life.

It’s essential to be aware of the potential for changes in your financial situation, such as having to pay for medical bills and other expenses that can arise with age.

#14. Change of Lifestyle

Retirement can come with a change in lifestyle and daily habits. 

Finding ways to stay active and engaged can be important for your mental health. 

This could range from activities like volunteering, traveling, or simply engaging in hobbies that you enjoy. 

The key is to find something that brings joy and fulfillment into your life.

Do You Know How Much Money You Need For Retirement

Do you know the right amount of money you need to enjoy retirement?

Headlines tell you that you need $1 million dollars or more. But this might not be the case. Find out exactly how much money you need.

HOW MUCH MONEY YOU NEED FOR RETIREMENT

Find Out If You Can Retire Using These Calculators

Are you confused trying to understand how much money you need for retirement?

You’re not alone. It can be a complicated process. The good news is there are some simple calculators to use to make figuring out your number easy.

THE BEST RETIREMENT CALCULATORS

How To Start Over Financially At 50

It can be difficult to start over financially at any age. But when you are 50, there is added pressure.

Not only do you have a limited number of working years left, but you also see how well others in your peer group are doing.

If you are starting over at 50, don’t give up hope. Here is how to drastically improve your finances.

HOW TO START OVER FINANCIALLY AT 50

Dave Ramsey’s Investment Advice Is Trouble

Dave Ramsey is the king when it comes to getting out of debt and building a financial foundation.

But his investment advice could leave you with no money to live on. Learn why you need to heed caution when it comes to his investing advice.

WHY YOU NEED TO IGNORE DAVE RAMSEY’S INVESTMENT ADVICE

Best States to Retire

While these were the worst states to retire, what are the best states?

Here are the ones with the highest quality of life, affordability, and access to healthcare.

TEN BEST STATES TO RETIRE