With all of the hard work and effort that it takes to reach retirement, no one wants their golden years upended by problems. Some problems are out of a person’s control while some are not.
A person cannot control their genes, but they can control their lifestyle. Living a healthy lifestyle by regular exercise and healthy foods can lengthen a person’s life no matter what type of genes they possess. Taking unnecessary risks is a quick way to end up immobile and unhappy. Creating stress with unwise choices can also shorten a person’s life span. Relationships can make a person’s life happy or miserable.
With the unpredictability of health problems, preplanning for medical expenses during retirement is highly important. Depending on the age of the retiree, Medicare may not be an option. Even if a person is eligible for Medicare, not all medical expenses are covered. A supplement plan helps keep these expenses at bay if an unexpected occurrence happens.
Improper planning and excessive spending can lead to financial ruin. If not looked after carefully, a retiree’s nest egg can quickly disappear during retirement leaving problems for future care. Developing and maintaining a budget during retirement can alieve many of the financial worries many retirees face. Proper savings during working years can assure that there is enough money to last the length of retirement.
Other problems can arise during retirement that has more to do with a person’s mindset rather than health or financial concerns.
Lack of Self Confidence
Even if a person has been a successful businessperson is their working career, almost all retirees feel some lack of self-confidence. There is nothing wrong with a bit of introspection, but when that leads to a complete lack of confidence in yourself, retirement can be miserable. Fear of risk taking, a general dread of making the wrong choices, and an overall time of self-doubt and worry all lead to a lack in self-confidence.
Just remember that it is usually an unfounded fear and that there is nothing wrong with looking inward for a little while. But, when it sends us spiraling into a tailspin, any retirement progress may fall off.
It happens because our self-confidence falters. Usually, for no specific reason, we begin to doubt ourselves and our decisions. And, for almost everyone, that period of fear and worry turns out to be unfounded. There is nothing wrong with introspection. But, when it throws a retiree into a tailspin, they are putting their retirement progress in jeopardy.
Staying with a Failing Plan
Many people are planners. They thrive on knowing what to expect in the future. Those who live on predictability and control often stumble during retirement. No amount of planning can give a retiree a perfect retirement. Wants, needs, and what is important will change over time, so detailed planning too far in advance can set up a person for panic and stress when things don’t go as planned. Often, these personality types will continue to plod on with their plan, even when it is obvious it is no longer working.
Instead, of doggedly sticking to a master plan, take the time to reevaluate goals, ambitions, wants, and needs. Many find that all of these change over time and that their original plan no longer works for them.
Modeling Retirement After Someone Else
The world is not full of cookie cutter people. Why should a retirement plan be any different? Yes, it would be easier if there were a book or website that had a person plug information into it and then spit out a retirement model that would assure a wildly happy existence. Unfortunately, there is no such book or website.
Because each retirement experience is different, it would be foolish to think that another person’s retirement is what yours will look like. There may be similarities, of course, but trying to do things exactly like someone else will not work for you. It only works for them.
When faced with saving for retirement, the need for instant gratification is one of the main challenges that people face. After retirement, it is tempting to overspend because a person has sacrificed for decades to get where they are in retirement. Now, it is finally time to sit back, relax, and take those European vacations. By slowing down, thinking of the later years of retirement, and putting spending to a minimum, retirees will be assured of a fulfilling retirement for their entire retirement, not just the first few years.
One threat that many retirees do not consider is long term inflation. Inflation averages 5% a year, meaning that a retiree’s investments must gain more than 5% yearly just to keep up with inflation. Hidden fees can also cut into a retiree’s annual return on investment. A 7% annual return may look good on paper, but if there is a 2.5% fee, then the investment really only nets 4.5%, not enough to keep up with inflation.
One major obstacle faced at retirement is a shift in assets to “safer” investments such as cash. However, without some type of risk involved, assets will be guaranteed to lag behind inflation and therefore have a negative gain. By diversifying even during retirement, these retiree’s will have a change at beating inflation instead of guaranteeing that they fail with safe investments.
The stock market will crash. It is inevitable. Knowing this going into any stock market investment, then these dips in the market do not have to be thought of as negative, but rather the natural progression of an investment.
Being overly optimistic when there are bull markets is just as bad as being overly morose when a bear market appears. Discipline and consistency leading up to retirement are critical. Maintaining this mindset after retiring is just as vital. When hurdles arise, take them with a level, calm head and you will likely enjoy a long, fulfilling retirement.