Warning, if you are looking for a feel-good story about how wonderful your retirement is going to be, just stop reading here…

Most of us dream of the day that we retire. The day when all our years work comes to an end. However, what might surprise you is that retirement isn’t always what is it cracked up to be. Don’t think that just because you quit working that your life will be easy – that you have “made it.” In fact, you might just figure out that reaching retirement isn’t quite what you thought it was. Here, we go through some of the potential downsides of retirement.

When you officially stop working, will your life live up to your expectations?

You Aren’t Going To Have Enough Money

So you were a good boy or girl and you saved religiously in your employer sponsored 401k. You assume that this money will make for a happy and care-free retirement. After all, that is why you saved for all those years right? Wrong. The simple fact is that most people who retire, simply aren’t going to have enough money to sustain the lifestyle that they have grown accustomed to. Although almost half of Americans admit that they aren’t saving enough. To make matters worse, a recent survey by Wells Fargo finds that at least one-third of all Americans will have to work beyond retirement age, and might well work into their 80’s. This essentially means that 33% of Americans won’t have enough money to sustain themselves and will die working. Pause….read that last sentence again. A little depressing huh?

You Will Likely Need To Downsize Your Home

Unless you are part of the one-third of Americans who own their home outright, you are going to enter retirement with a mortgage. The question then becomes, will you have enough money to make the monthly payment? For some the answer is going to be a resounding “no.” This means that you will want to consider downsizing your residence. You likely can move into a smaller, and therefore less expensive, condominium or other home. You might also consider moving to a less expensive State than the one in which you are currently living. There are options here however, if you have a mortgage, the likelihood that you will need to change homes is high.

You Will Likely Face A Health Insurance Crunch

Retiring before you reach 65? Well, be prepared to pay out of pocket for your health insurance because you won’t yet qualify for Medicare. Most people underestimate the cost of privately funded health insurance – it can be quite expensive and it certainly isn’t getting any cheaper. Health insurance premiums are growing much faster than the normal rate of inflation. To make matters worse, there are proposals out there to increase the Medicare eligibility age to 67 further prolonging your financial exposure to health care premiums.

Yet Another Health Related Downside

Do you imagine your retirement to be filled with travel, visiting family, and just simply enjoying life? While I certainly hope that is the case for both you and I, the facts seem to paint a different story. Studies have shown that retirees often face a decline in their health, both physical and mental, as well as suffer from problems with mobility and other general poor health issues. That same study found that these health problems were decreased if the retiree continued working part time and and continued to have physical activity. However, most people don’t envision their retirement to include a part-time job.

Your Lifestyle Is Going To Change

When you are a working adult you might have friends at work that you occasionally socialize with. Even if you don’t formally go out with people from work, you likely speak with your co-workers about your personal life, family, interests, hobbies, etc. Essentially, you socialize with them. What you might not have thought about, is that retirement can be a lonely endeavor. Think about it…you won’t have your work friends any more to talk to. Yes, they will say they are going to keep in touch but reality tells us otherwise. Also, if you are married have you thought about how much extra time you are going to have with your spouse? For most people this will be seen as a benefit. However, if you aren’t used to being around one another 24/7, then this will be a change that both of you will have to adjust to. If you have time to read it, here is an interesting article that touches on this issue.

If you have read this far then I hope you aren’t completely depressed. Yes, most us work with the hope of retiring and enjoying the fruits of our labor. However, as you can see, there is a downside and it all isn’t peaches and roses. From my perspective, one takeaway from this story is to enjoy your life as you live in. In other words, don’t waste your time today hoping for a better tomorrow. Don’t sacrifice fun or experiences now thinking that you will have them in retirement. As someone very close to me once said, “live each day to the fullest.” Using this philosophy, whether you are a working stiff or a retiree, you will have a smile on your face no matter the circumstances.



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