Given the size of the aging population, there is more retirement advice floating around than ever. Not all of that advice, however, is the sort of thing you should heed. In fact, some of it has the potential to take your nest egg and completely scramble it. Here is some commonly suggested but terrible retirement advice someone probably told you.
“Don’t worry about saving for retirement when you are young.”
Your youth is actually the best time to save for retirement. When you are young and single, you do not have a family that you also have to take care of or any of the obligations that come with it. You likely do not have a mortgage you are paying off, and you only need to be able to provide for one person, yourself. As such, you can funnel more of your paycheck into a retirement fund. It is true that you may be making less money when you are young, but this is offset by your lower number of obligations. Living on a tight budget as a young person might mean having to turn down going to the movie theater with friends and suggesting a night with Netflix instead. Once you have a family, living on a tight budget might mean delaying getting your daughter the braces she desperately needs.
“Use retirement to do all the things you couldn’t do when you were working.”
Retirement certainly does not mean you have to spend all your time sitting at home. You do, however, have to be realistic about the facts that come with living on a fixed income. You can still go do the things you love and the things you always wanted to do, but you have to be frugal about them. Chasing down bucket list items can add up quickly. Instead, spread out those things you always wanted to do or clump them together in ways that will save you money. For example, rather than travel during the summer when flights and hotels are always more expensive, go in the late spring or early fall. The weather is just as nice, but the trip will only be a fraction of the cost.
“Move to a community with nicer weather and lots of seniors!”
Lots of seniors retire to warmer places. Florida, for example, has a thriving retirement community. So do other areas in the South. Moving, however, is a big undertaking especially later in life. If you move when you are young, you are far more likely to remain healthy and be able to build up a healthy support network in your new city. When you are older, you have more health issues to worry about and less time to build a support network. It is also hard to meet other people as you age. Young professionals meet people at work, business activities and when running around like particularly social bumblebees. Elderly people, however, are less likely to be hitting the gym at 5:30 a.m. for Zumba class or trawling the bars at midnight looking for social contact.
Moving also carries with it the risk of not liking where you end up. If that happens, you may be dealing with rent or mortgage payments that you did not count on as well as trying to move a second time. This is not a good idea for your mental health or your finances. If you are thinking of moving, spend an extended vacation in the area to make sure you like it. Also, be sure to visit during all four seasons. More than one person has been mesmerized by Minnesota summers only to run screaming at the sight of the thermometer reading -50 degrees Fahrenheit come January or loved warm Georgia winters but been paralyzed with fright at the sight of a hurricane bearing down on them and swarming cockroaches in summer. Be sure you know what you are getting into before you pack up and move.
“Retire as soon as possible.”
Some people want to work until they physically cannot do so anymore. Others cannot wait to get out of the rat race. If you fall in the latter category, resist the urge to retire as soon as you are legally able to collect social security. Once you start collecting, the rate is fixed. A couple of extra years in the workforce, however, could mean Uncle Sam writes you a much larger paycheck. Run the numbers for yourself before you turn in your briefcase for good. The payout might be worth putting up with the daily commute for another two years.
“Enjoy having no obligations or places to be!”
Once you retire, you are going to have a lot of time on your hands. For the first week or two, it can be almost deliriously enjoyable to do absolutely nothing. The shine wears off, however, after about a month. You start getting antsy and can become bored or even depressed if you feel like you have nothing to do and no purpose in life anymore. Instead, make it a point to stay physically active, mentally sharp and socially engaged. Work as a volunteer in your community. Donate your time and accumulated wisdom to causes about which you are passionate. Babysit your grandchildren if you have any. If not, become the adopted grandparent to neighborhood children. Find some way to get out of the house and into a social scene.
Retirement can be a wonderful time of your life as long as you approach it with some common sense. Do not fall for advice that fails to satisfy basic common sense or can potentially leave you in a lurch. You worked hard all your life and earned your retirement. Make sure are able to enjoy it.
