3 Huge Retirement Mistakes You can Easily Avoid

July 23, 2018

The word retirement either brings tears of joy or looks of concern to people transitioning into this stage of life.

Some people are super eager to put their daily grind behind and look forward to their new life of leisure.

Others don’t quite feel the same. The loss of their identity associated with the role that they have played during their careers is terrifying. You are no longer what you do!

In any case whether happy or sad, retirement is a huge transition for most people. As with any transition the ending of one’s career is usually accompanied by a period of upheaval.

Even those people that so looked forward to retiring find that after a brief honeymoon there is a period of real questioning. In fact, a study by the Rand Corporation has found that 39% of retirees end up going back to some sort of work after two years.

There are many reasons why people may want to un-retire. Maybe they need a little more income? Maybe they miss the camaraderie of work?

Or, possibly they simply did not spend enough time beforehand coming up with their own retirement vision.

Wouldn’t it be better if you just got it right the first time around? Learned from the mistakes of others?

Retirement is a major life transition but many people just assume that things will work out on their own.

But that is not how life works. Why would you leave your life in retirement be dependent on chance?

Planning ahead is key.

After all you might have another 30+ years in this stage in life — wouldn’t you want to avoid some of the most common pitfalls made by people before you?

Learning from the mistakes of others can save you a bundle both in terms of lost time and frustration.

Mistake 1: Failing to come up with a personal Retirement Vision

How you frame a problem makes a huge difference. Research has shown that oftentimes people elect to work on easy problems rather than the real problem at hand.

They take shortcuts and frame the problem incorrectly. They ignore the difficult aspects of retirement such as what to do with all your newfound time and instead focus on issues that are easier to figure out.

They will consult with a financial advisor as to how to manage their assets in retirement but fail to discuss with their spouse or partner their dreams for travel and adventure.

“You’re going to go through life either by design or by default”

– Rick Warren

If you don’t choose your own Retirement Vision you will have to settle for the default option. What is that? Whatever way the winds are blowing. Despite your own unique differences you will be given the “one size fits all” retirement package.

What are you trying to accomplish during your retirement years? What is your ideal of a successful retirement?

For most people, retirement is about personal fulfillment. You no longer need to worry about raising a family or moving up the career ladder. This is your time now, but how will you make the most of it?

What is your own retirement vision and measure of success? If you are only paying attention to money issues you will probably be unfulfilled.

Think broadly about all the components of your Retirement Wealth — your physical and mental health, your social connections, work and passions, your financial security and your desired lifestyle.

All components of you Retirement Wealth are important and must be in sync with each other and be congruent with your fundamental values in life. What 3 or 4 values to you want to permeate your life with?

The first step in optimizing your retirement is to formulate your own vision of success.

  • What matters to you?
  • What does not and should be dropped?
  • What’s the ultimate legacy that you want to leave behind?

“A good solution to a well formulated question is always better than an excellent solution to a poorly posed question”

– Hammond, Keeney and Raiffa, Smart Choices

Are you crystal clear about your bigger purpose and why?

Mistake 2: Not clearly identifying key retirement objectives

To make good decisions you need to think carefully about your fundamental objectives. A decision is a means to an end.

Too many people get lazy and do not spend the time to think for themselves. They do what is expected of them or rely on auto pilot.

If you don’t figure out your objectives in retirement you will end up like driftwood on the Florida coast.

“You made it all up. Now make it up how you would choose”

– Alan Cohen

If you plan ahead and come up with your own “retirement vision” you will be miles ahead of the pack. You will have the necessary direction for creating tangible objectives regarding your:

  • Physical and Mental Health
  • Social Connections
  • Financial Security
  • Work and Passions
  • Lifestyle

What specific goals do you have for each of these components? All are important but what you value and how much is a personal decision.

For example, are you aiming to play tennis with your grandchildren into your late 80’s? Well, you’ll need to keep your fitness up with a program for cardio, strength and flexibility. You will need to keep score so your memory will need to be exercised on a regular basis. What are your overall health goals?

As people age, social connections become even more important. Have you thought about your circle of “best” friends and family that you can rely on during good and bad times? Have you invested in relationships — after all friendship is a two way street.

Many people focus on their financial security. They go to great lengths to figure out their “number”. Financial security is a pre-requisite to a successful retirement but it is not the only thing that people need to focus on. What good is money if you are sitting at home lonely and bored?

Do you have an idea how you will spend your time in retirement? Try to formulate your ideal day in retirement. Then do it for the next five days and you will most likely realize that you need some structure to your day.

The initial joy of not having anything to do quickly fades into boredom and a search for meaning. Don’t make this mistake — think hard about what activities give you satisfaction and fill your calendar with meaningful work or hobbies.

What is your ideal lifestyle? Is it one of leisure and comfort on the golf course? Or, is it one of adventure and travel?

Will you be staying in your current home or downsizing to a city apartment near restaurants and cultural activities? Do you want to shake things up at home or just keep going as is?

You alone get to make up your own roadmap!

Mistake 3: Ignoring the environment

The best laid plans can go awry if the environment you are in is not supportive. The voices of negativity will always win out.

If your goal is to get extra fit in retirement why would you live in a community where everybody socializes around the nightly happy hour?

If you are looking for mental stimulation would it not be better to live in a community of inquisitive people? Maybe a college town or urban center with loads of cultural and educational opportunities?

Environment does not just reflect your physical location but also your relationships. Have you ever noticed how being around happy and optimistic people has an effect on you?

Self-improvement guru, Jim Rohn, has said that “who you are is the average of the five people you hang around with”. Hanging around depressed and pessimistic individuals will cloud your own perspective on life

We operate in a society where ageism is rampant. Youth is prized above all else while old age is viewed as a burden.

When a person retires from work, the subliminal message is to accept your fate, move to Florida or Arizona and quietly enjoy your golden years on the golf course, enjoying early bird specials, and watching endless hours of TV.

Such an environment is highly unlikely to support a lifestyle of continuous personal growth, giving and graceful aging.

Is the environment that important?

Lots of research has shown that people tend to underestimate the importance of their environment and overemphasize their willpower.

Noted author, Ben Hardy, has recently published a book dispelling the notion that all we have to do is be stronger. In Willpower Does Not Work he summarizes recent academic work showing that willpower alone is no match to an environment unsuited to your higher level goals and ambitions.

Just focusing on yourself is not enough. Your environment must be in sync with your goals and aspirations.

If it is not you will adapt quickly and reflect the environment you are in. In the words of Viktor Frankel “a person can get used to anything, just don’t ask how”

Ready to plan a retirement with possibilities?

Most people retiring today will spend 30+ years in this next phase of life. Transitions can be hard even when properly planning ahead of time. Not planning or thinking about what you want is most likely going to lead to boredom and a generally unfulfilled life.

One of the most effective ways of learning is to look at what mistakes others have made before you and try to avoid them.

Figuring out your higher level “why” and “what” are key prerequisites for your retirement success.

The particulars of how you choose to live your life are less important as long as it is a life of your own choosing.

If you figure out these three things before you retire you will be miles ahead of the pack:

  • Your vision of what your retirement will look like
  • Your key objectives regarding the components of your Retirement Wealth (health, social, financial, work, passions and lifestyle)
  • The type of environment most supportive of your vision and goals

If you are looking for additional questions and perspectives to guide you as you formulate your vision check out our Retirement Wealth Checklist.


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About the author

Eric Weigel

My goal is sharing my experience as an investment manager, certified retirement coach, and fellow Baby Boomer to enable people to design the life they want and that matters to them in their next phase in life. We all want to live longer, but we also want to lead a life of meaning, joy, and fulfillment.