I have seen people overspend during their honeymoon period on travel, renovations or real estate, or just shopping. They have not dealt with the retirement realities of reduced income. Careful of party time attitudes as you adjust to your new financial reality. By all means enjoy your honeymoon time but without jeopardizing your secure future!
Here’s what you shouldn’t do once retirement arrives
March 26, 2020
We spend much time seeking out great value-adding, life-enhancing things one can do in retirement. But here’s a worried thought – what shouldn’t we be doing in our life after work?
Save with SPP had a look around with a different theme, this time – what not to do!
The USA Today newspaper lists a number of things to not do in your crucial first year of retirement.
A key mistake, the newspaper notes, is “not having a financial or life plan.” David Laster, a U.S. financial author, is quoted in the article as saying “only 42 per cent of workers try to calculate a budget before going into retirement. If you don’t do that, that leaves you vulnerable to some unpleasant surprises in retirement. And it can be painful.”
Other things to watch out for in year one, USA Today adds, are overspending, claiming government benefits too early (you get more the longer you wait) and being too conservative with investments.
At the Yahoo! Finance site, author Gabrielle Olya adds a couple more – ignoring inflation, and not seeking the advice of a financial planner.
“Although the inflation rate seems minimal, it still affects how far your dollar will go,” she writes. “This is especially true for money held in fixed savings accounts, which unlike money in certain investments, will lose value over time.”
Going it alone on finances, she warns, may mean you are “losing out on how to improve (your) financial readiness.”
The Gilbert Guide blog adds a few more, including having too many cars, moving at the wrong time, and getting “sold or scammed on services you don’t need.”
Try to avoid having multiple vehicles, the blog suggests. One will do for most retired couples.
Moving is a very important consideration as well, the blog notes. According to retirement specialist Bill Losey, who is quoted in the article, “many people relocate based on a couple of specific factors, such as low real estate costs or low taxes, then discover that other costs more than eat up their savings.”
Losey goes on to say in the article that if you make an expensive move – then change your mind and move back where you started from – the move is even more costly. Before choosing a retirement move, the blog advises, consider “hidden costs” such as property taxes, sales taxes, grocery costs, and other basics. Staying put may make more sense, the blog advises.
Save with SPP has noted a few other things. If you consider your retirement to be an unending vacation of travel, meals out, expensive hobbies and doing new things, you may run out of money before you run out of ideas. It is perhaps better to think of retirement as being a permanent weekend – you won’t be going into work, sure, but you won’t be jetting to the south of France either. You’ll be shovelling the driveway and trying to get the wretched filters to stay in the range hood after you’ve cleaned them. It’s important to be practical, and enjoy life within your means.
A nice feature for folks who save for retirement via the Saskatchewan Pension Plan is the fact that it offers life annuities when you retire. With an annuity, you get a pre-set payment every month for the rest of your life. You can never run out of money, and SPP allows you to provide for a surviving spouse or beneficiary as well, so you can pay that security forward. Check them out today.
|Written by Martin Biefer
|Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22|
Mar 23: Best from the blogosphere
Mar 30: Best from the blogosphere