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Biggest Retirement Mistakes I See, Ep 44

In today's episode, I'm once again going off-topic from equity compensation. It’s my podcast… I’ll do what I want 😂. I thought I would hit on a topic I'm aware of from seeing it with my own clients and clients of other advisors I know. The short version is I want to share some thoughts on some of the biggest retirement mistakes I've seen in my years. This will not be things like not starting your savings early enough or choosing the wrong social security start date. Nope. These are mostly more qualitative mistakes and something I've learned from watching my clients and talking to other advisors is to make sure your retirement is your own!

You will want to hear this episode if you are interested in...

  • Retirement doesn’t mean your brain can take off for the rest of your life! [1:12]
  • Retirement doesn’t mean your life revolves around your kids or grandkids! [3:16]
  • You don’t—and shouldn’t—wait for retirement to START enjoying your life! [5:28]
  • Retirement on YOUR terms [7:46]
  • This week’s FLASHBACK [10:26] 

Mistake #1 is NOT staying mentally active in retirement. Whether it's volunteering, picking up a part-time job or auditing classes at your local college, the key here is to keep your brain challenged. Too often I've seen and heard of clients who stopped working and then they spend their days just watching Fox News all day long or hanging out on Facebook or whatever it is that results in them shutting their brain down. The brain is a muscle that will become mush if you don’t exercise it!

Mistake #2 is moving full-time to where the kids are, especially if it involves helping raise the grandkids. Now I get it, there may be extenuating circumstances. However, I'm talking about the people who pack up everything, sell their house, leave the community that I've known for years to move across the state or country to do it all over again. It’s almost always the same. It's great initially. However, if the kids move, it usually results in the parents doing the same. The biggest problem I hear with this is that the grandkids eventually grow up! At which point grandparents realize how much they’ve sacrificed and left behind.

The #3 mistake is waiting until retirement to enjoy life. We've all heard those stories about the person who retired but never had a chance to enjoy it because they ended up getting sick, become physically unable to do the things they want, or even passing away. This leads us directly to mistake #4 and not retiring on your terms. 

People say they will retire when their advisors tell them they have saved enough. It's an old-school concept. Holding off on retirement until your advisor says you have enough money saved to retire is based on the old model of (what I preach against) retiring one day and just hanging it all up. Maybe there are some vacations and lots of rounds of golf, but what if there were a better option? like retiring on your own terms and not just because of an outdated definition of retirement. I'm not sure what to call this, maybe lifestyle retirement is the right term. Simply designing your retirement based on your individual needs, wants, and goals. Maybe you're turning 60 and instead of busting your butt for another five years before you retire, you decide you lighten the load at work and take more time off now. However, the trade-off is working for another 8 to 10 years before you fully retired. In this scenario, you get to stay mentally engaged through work AND you can take advantage of your health now and start checking items off the bucket list. Additionally, you’ll improve the odds of a successful retirement by delaying when you have to start accessing your retirement savings.

This week’s FLASHBACK: Broken Bones

Since I mentioned my broken leg in the episode I figured this flashback section would be about broken bones. Fortunately, I've only had two in all my years. The first one was when I was a year and a half old. I broke my arm jumping from the couch to the coffee table and back. I was too young to remember it but I still have the cast. My kids laugh at the size of it; even though it went all the way up to my shoulder it is tiny. 

The second was a broken leg in high school. A group of us were meeting up to go to a few haunted houses around Halloween. Our parents all dropped us off at a local Burger King and we were going to walk a couple of blocks to the haunted houses. Unfortunately, I didn't make it out of the parking lot without breaking my leg. Some lady pulled into the driveway and clipped me as I was walking. Fortunately, a friend of mine grabbed me and probably kept me from getting dragged under the car. The lady never even stopped. At the ER I found out it was a clean break so four weeks in a cast and then two weeks in an air cast. There were two good things with the broken leg. First I was given a pass to use the elevator at high school. The second was the break healed up right before ski season began. Thank goodness for good timing.

I’m Dan Johnson, CFP®, founder of Forward Thinking Wealth Management. I run a flat-fee financial planning and investment management firm located in beautiful Akron, OH. Although I am in Akron, OH, I work with clients regardless of location. I cater to owners of equity compensation positions who are looking to organize their financial lives, keep more of what they make, and do the things they want in retirement and even now.