Aging has its rewards. Your children have moved out and have families of their own. You can spend time with your grandchildren, and enjoy a quiet cup of coffee. If you are still working, you are looking forward to retirement, with plans to travel or maybe downsize to a smaller home.
At LifeFone, we want you to be independent, and be able to do all the things you love in retirement. Here’s four post-retirement mistakes and how to avoid them.
- Succumbing to the post-retirement spending spike - This may come as a surprise, but the spend more; not less in the first few years of retirement can sneak up on you. The feeling of ‘whee! I’m free’ can take over, and you spend more than you should on everything from new golf clubs to home upgrades. The simplest way to avoid that is to make a budget based on long-term planning and stick to it. Anticipate home repairs, travel, and new golf clubs and build it into your budget.
- Keeping extra vehicles – Perhaps there’s a reason to hold onto the ‘second’ car. If you, or your spouse, is still working, then by all means, hold onto it. If not, you should consider selling it. There may be a specific reason you’re keeping it, but maybe you can switch things like a luggage/bike rack to one car. By selling the car you’ll save in gas, insurance and maintenance. If that second vehicle is an RV or other type of luxury item, consider leasing it out.
- Moving at the wrong time - Retirement is here, and you’ve decided to downsize. The thought of not having to mow the yard or shoveling snow is appealing, so you purchase in a spot that those amenities are provided. Maybe you choose a location where the real estate costs are lower. All are great reasons to consider a move. However, there can have hidden costs. Simple things like, higher property taxes; shopping and doctors are further; HOA fees; these hidden expenses can add up to you spending more. Before moving, look at all the items that could cost you money in the long run.
- Underestimating medical expenses – “It won’t happen to me”. Perhaps not, but, it could. When you and your spouse are healthy, you don’t consider medical expenses that could come up. Unfortunately, odds are, one of you will encounter medical expenses that were unforeseen. Even with Medicare, the hidden costs of co-pays and deductibles can add up. Do the math and make sure you estimate for retirement savings to include money to supplement your Medicare, and consider purchasing supplemental health insurance to fill in the gaps.
At LifeFone, we know retirement can be fun and exciting. By being aware of these four post-retirement mistakes, you’ll have more time and money to do the things you planned on doing.