As you begin planning for your retirement and the exciting new phase of life that comes with it, it would be wise to check your expectations. The reality may not be what it seems. Those in the Baby Boomer generation, currently in their 50s and 60s, have begun to show a trend in viewing retirement very differently than those who came before them. Many Boomers consider retirement as their chance to begin a new hobby, passion or even career, which is good. But unfortunately these soon-to-be retirees may not be seeing the whole picture.
Here are five of the most common fallacies surrounding retirement:
- Retirement is like an extended vacation. Living a life of leisure will be great, right? Unfortunately not. Having too much spare time leaves many retirees feelings depressed, or without purpose. Scientific studies show that those who continue working after the age of 65 actually tend to be happier, whether or not they do so by choice. But above all, voluntary part-time workers were the happiest with their life. While money is the main motivation to work through retirement, having day-to-day duties and satisfaction are just as important.
- Money is the most important piece to your happiness in retirement. The biggest key to a happy retirement is good health, so just having financial security is not enough. But money only relates to happiness to a certain level, you can still enjoy your life as a retiree even if you are not a millionaire.
- Spending is consistent during retirement. People tend to spend less money in retirement, but this does not always hold true. Many find themselves traveling and enjoying vacations for the first few years, but as the years go on the number of trips generally decreases, while the cost of medical care and family expenses increase. A couple should expect to put aside $220,000 to cover their health-care throughout their retirement. While medical expenses are usually a large concern for retirees, very few spend time planning for that.
- Retirement is for couples. As a married couple there is a large adjustment to be faced upon entering retirement. One in three couples don't agree on their ideal type of lifestyle they wish to have in retirement. You should also be aware that you and your partner will require time to themselves, for their own hobbies and passions.
- Your financial planning stops at retirement. You will still have many problems that you will deal with during your retirement. This means you will have to continue the planning of your investments to make sure that your money will last as long as you do.
Retirement is not the lifestyle that you leave, but the one that you begin. Just because you reach a specific age does not mean you are required to stop working, and if you do, it is important to remember that to stop working does not mean you stop planning. To enjoy life without worry, you must plan.