What you should NOT do in retirement years
Sometimes we forget how old we are. This is particularly dangerous in the retirement years. While retirement is a significant life transition offering freedom and flexibility, it also presents risks that can derail an enjoyable post-work life. Retirement might not be the best time to build a new house; also perhaps not a good time to take up wrestling, lone world yacht sailing, or bungee jumping. Not to mention investing in untested new business ventures.
To navigate retirement years successfully, retirees should avoid certain pitfalls that can jeopardise their financial stability, mental health, and overall quality of life. These mistakes are more common than you would think. So we advise you take cognisance and care of the following useful points. (And avoid fancy moves on the jungle-gym that the grandkids do…)
Don’t allow financial planning to take a back seat
Retirees often underestimate the importance of maintaining a robust financial plan throughout retirement. The plan should have been with you during the working years, consolidated as you approach retirement, and maintained during retirement. This is not the time to kill the goose that lays the golden egg, because then you are likely to deplete your savings and overspend.
- Don’t adjust a conservative budget. Keep to the rules during retirement in the same way you did when nurturing your nest egg. Cost of living will rise, and you must remain alert and prepared. This includes healthcare costs – which invariably will rise as you age, blooming considerably as you approach possible long-term care. Never skip your regular checkups.
- Don’t skip your estate planning. Without a will or trust, assets may not be distributed according to one’s wishes. And don’t think you have everything buttoned down. Always regularly consult a financial advisor to update your retirement strategy.
- Don’t rush into major decisions that may adversely affect your finances
Retirees sometimes feel that with their newfound freedom comes the thrill of doing exactly as you please. Don’t start major redecorating, moving to a bigger house, or locating to a new country without fully understanding the cost of living, healthcare availability, or lifestyle adjustments. Now is not the time to invest in risky ventures or impulsive sale of your home. Take time to weigh all decisions in light of your financial plans. - It’s not wise to rely solely on fixed income sources
Don’t forget the value of diversity in your investments. Rely on a good financial advisor to keep you abreast of developments and opportunities. And don’t give up the idea of continuing to work – either part-time or on contract basis. This will also generate mental stimulation.
Don’t let go of social and lifestyle activities
- Try not to allow retirement to interfere with the social lifestyle you have been used to. There are many ways to keep up with friends, former colleagues, or join community and charity groups. Keep healthy with exercise routines and walking. And don’t let the mind sink into the television, which can become a mental deathtrap.
- Purpose and routine should always remain top of mind. While leaving the working world may bring total freedom in your day, keeping up some sort of routine and focus is still important to avoid boredom and dissatisfaction.
- Many retirees make the mistake of overlooking enjoyable leisure opportunities. While saving money is essential, being overly frugal can lead to missed opportunities for enrichment and joy, such as travel and new hobbies. Budget for experiences that enrich life because there are ways to balance financial prudence with indulgence.
Avoid overcommitting to family
This is a tricky one because so many retirees give up their personal ideas of a relaxed retirement and devote time to family care-giving. While this is a natural instinct, it shouldn’t replace your freedom to make wider choices and follow your own heart. Some people eventually find they are doing nothing else – sacrificing so much time and energy that they suffer burnout.
Another mistake is spending or lending too much money with regard to family financial problems. While it’s a natural reaction to care, you must not forget your own commitments and needs. Set boundaries and balance your time shared.
In addition, you might live longer than expected and need that extra money. It’s vital to anticipate a decline in old age, and that you may need assisted living or frail care.
Retirement can be the most rewarding phase of life when approached with careful planning and mindfulness. By avoiding these pitfalls, retirees can ensure financial security, maintain their health, and enjoy a fulfilling, purposeful retirement.
Empfin Solutions – the team that keeps your team happy
We’re an Old Mutual franchise with our primary focus on the three main areas of concern in everybody’s financial planning:
- Your Company Benefits – advising on, and servicing umbrella pension and provident funds.
- Your Personal Financial Planning and Provision – Estate planning, Wealth Creation and Retirement Planning.
- Your Assets – motor and household insurance.
Always striving to be a trusted partner in facilitating financial solutions for organisations and individuals, our dedicated team of fully accredited, experienced professionals have a passion for satisfying customer needs and providing a truly client-centric service.
Find out how you can benefit at: www.empfinsolutions.co.za
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