I know there are more than seven things to avoid as you move toward, and then through, your satisfying retirement. But, in the interest of brevity I have picked these examples of things to avoid.
Of these seven, I committed three of them early on. Even so, twelve years later things are progressing very nicely. None of those screw-ups was fatal to my journey. OK, so what are the seven mistakes of retirement?
1) Try to copy your parent's retirement. Except in rare cases this is not going to happen. The days of solid company pensions and gold-plated health care coverage are not coming back. Responsibility for a happy retirement lifestyle is now firmly ours to determine.
Another important difference is probably your approach to your health. Never terribly active, my mom and dad stopped any type of physical activity shortly after retirement. I firmly believe that destroyed the quality of life for my mom's last few years and quickened her death (3 years next month). Dad underwent a quintuple bypass 9 years ago, brought on in part by a poor diet and a sedentary lifestyle. Today he spends virtually all his waking hours in a chair, reading and napping. That is not acceptable to me.
2) Try to copy a friend's retirement. Retirement is as unique as you are. Wanting to live like Bill or Sally or whomever is not likely to work. It is as pointless as "keeping up with the Joneses" during your working days.
The mix of financial, emotional, relational, and health status that defines you means your retirement must be built for you. If anything positive has come from the economic downturn, it is the realization that most of us can be happy and satisfied on much less than we thought possible. Your best friend spends his summers in the south of France, you in Portland. Are you happy? Then, send your friend a postcard.
3) Do whatever a web site or books tells you. I have written several thousand words on the risks involved in depending on others to design your retirement for you. It is important that you educate yourself, using all the resources you can. But, it is just as important that you adapt all those suggestions and ideas to your needs, your interest, and your comfort zone.
4) Assume things will work out. This laissez-faire approach to something as important as the next 20 or 30 years of your life is extremely risky. Maybe you have always landed on your feet: great job, lots of money, loving spouse and cute, well-behaved children, an in-law you like...Not so fast. Life has a habit of throwing you a curve ball just when you least expect it.
Things will work out, but probably not how you'd like them to. Proactivity is is a much safer course to a retirement lifestyle you want.
5) Count on financial promises and performances to remain unchanged. When I retired in June of 2001 I had a budget that had been under development for a few years. I based it on my experience and best guesses. Boy, was I wrong. Most importantly, over the next several years my investments didn't produce nearly as much as I had expected. My financial advisor made a few really bad recommendations that I accepted and lost enough money to bother me.
Next a bank that I had tens of thousands invested in went belly up. When do banks go under? Also, I failed to anticipate the massive, annual, increases in the cost of health care insurance for Betty and me. Who would have thought any industry could try to drive away its customers with 15% increases year after year? It took a fair amount of scrambling on our part to stem to bleeding and adjust to the new reality but we did.
6) Not trusting your instincts and decisions. I have become a firm believer in my innate instincts and "gut." I am continually gathering information and constantly relooking at our finances and lifestyle choices. As time went on, though, I gained more confidence in my ability to make a good decision based on what seems right to me. I have made mistakes that have cost me money and wasted time. At times I have followed a path that turned out to be unsatisfying for me or Betty. But, overall, I now will trust an instinct rather than be stuck in a no-decision mode for an extended period.
7) Panic. Oh boy, did I fall into this trap. After retiring I had major night terrors over my decision. Even though I had done a thorough job of planning, I kept feeling I had forgotten to take something really, really important into account. As point #5 above notes, I did forget or overlook some things that cost me.
But, the panic I felt was much more general: we'd run out of money at an early age and live on the streets. My parents' estate would turn out to be built on sand and we'd have to find room for them in our house. I would never find a passion and spend my last years in an easy chair, watching game shows.
Panic is part of the first phase of almost all retirements. After such a huge lifestyle change that is normal. What is self-defeating is to let panic debilitate you and cause you to make choices based on fear or anxiety.
Your turn. What mistakes have you made that you'd advise others to avoid? If you could go back in time what would you do differently? A satisfying retirement is a nonstop learning experience for us all.