You probably know the more obvious ways to sabotage your retirement. Things like:
- Not saving enough (starting late, starting and stopping contributions, not contributing enough and so on).
- Cashing out your retirement funds when you leave a job.
- Making poor investment choices (taking too little or too much risk).
But there are a lot of lesser-known ways to mess up your post-work years, either in the years leading up to your quit date or afterward.
You could:
1. Think only about the financial side
The lion's share of retirement advice is devoted to how to save and invest your retirement funds, with another whole substratum of counsel that focuses on withdrawal rates.I've talked to hundreds of retirees over the years, though, and their message about what really matters is a bit different. Yes, money is important, particularly if you don't have enough. But equally vital are:
- Good health.
- Good relationships with family and friends.
- Absorbing interests.
Ralph Warner, the author of "Get a Life: You Don't Need a Million to Retire Well," calls the focus on amassing money "hugely exaggerated and sadly incomplete." All the money in the world won't compensate you, he says, if in your rush to acquire it you damage your health, wreck your relationships and fail to develop passions, hobbies or volunteer work that connect you to life.
So, while you're saving, think about where you want to live in retirement, what you will do with your time and whom you want spend it with. If relationships with your loved ones are suffering, work on fixing them. If your health habits aren't the best, improve them. If most of your day is spent working, carve out time after hours or on weekends to explore new interests. Warner quotes Hermann Hesse: "Happiness is a how, a talent, not an object."
2. Fail to get a second opinion
Until recently, it was tough to get truly objective financial advice. Most of those who held themselves out as advisers -- often insurance salespeople and stockbrokers -- gave such conflicting advice that many people felt safer just handling their investments themselves.The world has changed. There are now fee-only financial planners who specialize in providing nonconflicting advice by the hour. (Many are represented by the Garrett Planning Network; for other options, read "Don't panic; get a financial adviser.")
Fee-only planners are not exactly cheap -- figure $100 to $150 an hour, with several hours required for a retirement plan review -- but an investment in their time can help you learn if your retirement plans are viable and prevent you from making financially devastating mistakes: retiring too soon, spending too much, messing up your investments, tapping the wrong accounts or running afoul of Internal Revenue Service rules on withdrawals.
The problem is that it can be hard to convince a longtime do-it-yourselfer that he or she needs help or that it's possible to find someone to trust. It's worth making the effort, though. The decisions you make near retirement can have lifelong consequences and are often irreversible, so you'll want to make sure you get it right.
Continued: Spousal Social Security benefits
