Are you looking forward to the day when you will be able to retire? It’s fun to fantasize about all the activities you’ll have time for and the trips you’ll take, but planning for retirement is an entirely different story.
Failure to do so may result in regret, according to a 2021 Coventry Direct survey, which found that 26% of retirees do not live the lifestyle they desired upon retirement. What are the most common retirement regrets, and how can you avoid them?
1. Investing Without Diversification
According to the report, 52.8% of retirees regret not saving sooner, and 32% are unsure whether they will be able to live comfortably for the rest of their retirement.
Richard Ricciardi, a partner at Powell, Jackman, Stevens & Ricciardi and an estate planning attorney, advises consumers to diversify their portfolios well before retirement. This reduces the possibility of losing money. When one or two of your investments perform poorly, others may perform well to compensate. He also advises shifting to less hazardous investments as you approach retirement.
The volatility of the real estate and stock markets may wreak havoc on a person’s financial security, he stated. In retirement, the nature of investments must alter to less risky methods focused on income rather than investment gain.
2. Not Seeking Professional Financial Assistance
Because of the abundance of self-help investment options, some people prefer to manage their investments without the assistance of a financial adviser. However, Ricciardi believes this is a mistake.
A comprehensive financial plan can provide valuable insight into how far your money will take you in retirement, he explained. Multiple techniques should be evaluated, and listening to professional guidance is essential for successful retirement planning.
3. Not Planning for Reduced Capacity
You’ll probably require additional assistance with some chores or decisions at some point in your life – preferably far down the line. Not planning ahead of time can lead to regret.
Powers of attorney, healthcare directives, wills, and trusts should be established before or early in retirement, Ricciardi advised. That way, if a person loses the ability to manage their affairs, there is a plan in place.
4. Not First ‘Practicing’ Retirement
You may want to practice what you would like your retirement life to be like as you get closer to it. According to Patti Black, a certified financial advisor at Bridgeworth Wealth Management, one of her customers achieved this by taking longer trips in their RV as they approached retirement.
They discovered the ideal amount of time to travel — not too long, nor too short, she explained. They also decided how to spend time together when they weren’t on the road. This assisted Black’s clients in determining which experiences worked for them and which did not.
They didn’t wake up on the first day of retirement and fall into an idyllic routine, Black explained. They tried numerous things, discussed what worked and what didn’t, and made improvements.
5. Having No Plan for Retirement
Looking forward to retirement is easy since you’ll be free of the 9-to-5 grind. However, if it is your exclusive concentration, you may be disappointed when it comes to retiring.
Spend time thinking about what you want to achieve, Black advised. Who are you, and what will you do now that you’re not working? Playing golf isn’t a goal!
6. Not Enough Non-Working Friends
If all of your friends are from employment, the adjustment to retirement may be painful. According to a 2021 study, prolonged loneliness in retirement was linked to illness, impairment, and more advanced biological aging. The researchers concluded that social interactions might promote healthy aging.
Look into volunteer groups, clubs, and programs that interest you as a potential source of new friends, Black advised. In retirement, people may feel disconnected, and finding a new tribe requires time and effort.
7. Not Communicating Expectations With Your Partner
Black advises couples approaching retirement to be patient with one another and communicate their daily expectations clearly.
For example, do you plan on eating lunch with your spouse every
day? Will you spend time on activities together daily, or will you have separate routines? Will you invite folks over regularly? Having open communication and expectations can make life easier.