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When it comes to retirement, we all picture endless free time and doing whatever we want.
But the harsh reality is that your golden years aren’t always sunny.
In fact, some not-so-nice surprises could be waiting for you.
And while most people can navigate these tricky situations, some can’t and end up not enjoying retirement.
The good news is that by learning these things now, you can plan so you can enjoy your retirement years.
#1. 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.
#2. 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.
#3. 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.
#4. 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.
#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. 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.
#7. 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.
#8. 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.
#9. 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.
#10. 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.
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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.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.