Expert's View

Last week I filled you in on financial mistakes you could make while planning for retirement. I want to conclude this series with some lifestyle-related issues that need to be considered.

Retiring in anger or frustration

Every job and every workplace comes with frustrations. It could be the workload or working conditions, a new know-nothing boss, unfair scrutiny from outside, inadequate budgets, the commute—the list goes on and on. It’s tempting to one day simply announce “That’s it, I’ve had it.”

If you retire on the spur of the moment, you may come to regret it. What seemed like a good idea at the time may backfire on you.

First, you probably won’t have worked through the potential financial mistakes I covered last week—such as failing to make sure you get credit for all service includable in an annuity calculation—nor the lifestyle issues below.

To make things worse, you might have a long wait before you get your first retirement check. That’s because none of the groundwork will have been done to assure that your application will flow smoothly through your agency and OPM. Errors that could have been corrected ahead of time will inevitably hold things up.

Failing to fully include your spouse in your retirement planning

If you have a mate and retire without cutting him or her in on that decision, you may find out that those “golden years” are anything but. Part of this relates to the stress of lowered finances. While you may not need a financial advisor to do your planning, you will have to do more than a little quick arithmetic in your head to determine if what you’ll receive in your annuity plus other income such as drawing on your TSP account will cover regular expenditures plus any new expenses you’ll incur, such as for hobbies you plan to take up and – after the pandemic is over – dining out and travel.

Beyond finances, though, retirement forces major adjustments in lifestyle. Routines will get upset, minor irritations may become major ones and, instead of pulling together, you may pull apart. If you’re both employed, your spouse might not be ready to retire when you are ready, for a variety of reasons. What would be the implications of that?

If your spouse already is out of the workplace, or would be able to retire along with you, how you will handle more togetherness than you are used to? You may have gotten a taste of this already if both of you are now teleworking all of the time, or almost all of it, due to the pandemic. How’s that going?

That leads to the next potential problem:

Failing to decide what you’ll do with your spare time

It may not have occurred to you, but after you retire there will be an awful lot of hours to fill.
If you’re lucky, you’ll be moving from one job to another, starting your own business, volunteering, or spending more time on a hobby or even a side business. What you don’t want to become is someone who just gets in the way of family and friends alike. While it isn’t possible to know exactly what the future will hold, you shouldn’t use that as an excuse failing to plan ahead.

Relocating without considering the consequences

While it’s an attractive idea to retire and immediately move somewhere else, like a cottage in an area where you’ve spent you summer vacations, you really ought to take your time planning what comes next. You’ll need to get accustomed to being retired, explore your options, discuss the alternatives with your family, and visit those potential retirement places year round.

A great vacation spot may be a miserable place to live during the rest of the year. Also, what you may gain in recreational possibilities or lower costs, you may lose by breaking ties to the area you live in now and severing friendships built up over the years.

Oh, by the way, if you’re thinking about moving near one of your children, just remember this. They might not be as keen on the idea as you are. Besides, they may have to (or want to) move away some day themselves.

Mistakes to Avoid When You Retire from a Federal Job

Thinking about Retirement – High-3 and Leave Considerations

Thinking about Retirement- Picking a Date

Supplement Paid to FERS Retirees Until Hitting 62

FERS Retirement Guide 2022