Ep # 63 - Mistakes you Might be Making in Retirement Planning, Pt 2
We continue to explore critical aspects of preparing for retirement, urging you to look beyond just financial readiness. From overspending early in retirement to underestimating life expectancy, we examine various retirement risks, emphasizing the need for a comprehensive approach that includes staying socially engaged, continuous learning, and nurturing emotional and psychological well-being.
With actionable insights whether you're approaching retirement or helping a loved one in their retirement journey, this podcast offers a wealth of wisdom and practical tips to ensure a retirement filled with purpose, financial stability, and a vibrant social life.
What You’ll Learn in Today’s Episode
Overspending Early in Retirement: Early retirees often have grand plans for activities like travel or rentals. It's crucial to do a dry run of expected cash flow and be realistic about spending. Setting spending parameters, like using "guardrails," can help manage expenses throughout retirement.
Ignoring Inflation: Inflation can significantly impact retirement finances, and it's essential not to underestimate its effects when using retirement calculators. Recent fluctuations in inflation rates emphasize the importance of factoring in inflation when planning for retirement.
Staying Active and Socially Engaged: Maintaining social engagement and an active lifestyle in retirement is vital for longevity and mental well-being. Disengagement can lead to depression and other health issues, making it essential to stay connected and involved with family, friends, and various activities.
Continuous Learning: Retirement should not be seen as merely retiring from something but retiring to something. Continuously learning new skills, engaging in new activities, and finding purpose beyond work are crucial aspects of a fulfilling retirement.
Seeking Professional Advice: Retirement planning is complex and should not be taken lightly. Relying solely on online calculators or incomplete resources can lead to mistakes or omitted crucial details. Engaging with a retirement planning professional can help ensure a well-rounded and secure retirement strategy.
Ideas Worth Sharing
· "Retirement can be a little bit overwhelming. It’s why we have a job. It's not as simple as we might want it to be.
· "Being a lifelong learner is kind of like staying socially engaged. It's really important for a more enjoyable purposeful retirement."
· "At the end of the day, people are living longer than they expect to. You need to plan for that."
· "It's not necessarily the end of the world, taking debt into retirement, but one of the problems is, which we've really seen in the last year, is that it's really hard to predict what interest rates are going to do."
· "Retirement should not be seen as merely retiring from something but retiring to something."
Resources in Today’s Episode
Retirement Planning Simplified
“Less than 1% of Canadians choose to delay CPP. Here’s why the rest are missing out” – FP Canada
Ep # 2 – YRPS – The Taxation of Retirement Income
Ep # 18 – YRPS – Canada Pension Plan and Old Age Security Timing
Ep # 6 – YRPS – Retirement Risk # 1 – Sequence of Returns and Why the Game Changes in Retirement
Ep # 7 – YRPS – Retirement Risk # 2 – Longevity
Ep # 8 – YRPS – Retirement Risk # 3 – The Risk of Being Too Conservative
Ep # 9 – YRPS – Retirement Risk # 4 – Inflation Risk
Ep # 29 – YRPS – Executor Help with David Edey
Ep # 10 – YRPS - Retirement Risk # 5 – Healthcare Expenses
Ep # 13 - YRPS – Safe Withdrawal Rates and Traditional Retirement Projections
Ep # 14 – YRPS – Dynamic Withdrawal Strategies
Ep # 16 – YRPS – Living a Passion-Driven and Authentic Life with Scott Armstrong
Ep # 24 – YRPS – The Curated Retirement, Interview with Retirement Coach Tammy Vigue
Ep # 59 – YRPS - Empower Your Retirement: Strategies for Boosting Brain Health with Jen Johnstone and Sarah Cook
Avoid Overspending! Master Your Retirement Budget
Retirees risk a fulfilling retirement turning into a financial nightmare without an active plan.
On this podcast, we delve into topics that can often be daunting, like longevity risks and the potential drawbacks of taking on debt in retirement.
In this episode, you will be able to:
Unearth the hidden risks in retirement and the critical importance of extensive strategizing.
Reveal the dangers of giving in to excessive early retirement expenditure.
Understand the underestimated power of inflation in retirement-budget forecasting.
Comprehend the significance of staying engaged with society and leading an active life after retirement.
Recognize the key importance of continuous learning in keeping your retirement life vibrant and fulfilling. List 3:
Many people forget to take inflation into account when planning their retirement. We've all been there, making a budget and assuming it's the final figure. But forgetting about inflation is kind of like assuming your grocery bill will stay the same year after year - and we know that's not going to happen!
Joe highlights how inflation rates have recently increased significantly. He emphasizes that it's crucial to consider inflation when estimating your future financial situation. It's not simply about what you're likely to earn, but also what your expenses might look like given the context of inflation.
Staying active and socially engaged in your retirement enhances your overall health and happiness. It's a bit like owning a puppy, the more you play, the happier you both are! But what if you're an introvert, or live somewhere remote? You can still achieve this through online meetups or apps like “Meet Up”.
Lack of social engagement increases the likelihood of depression in retirees. Even issues like hearing loss can have an impact on social interactions and cognitive health. It’s kind of like missing out on your favorite song because the music is turned down. Ensuring your physical health aids your social health, and it's essential for maintaining quality relationships and an engaged mind during retirement.
The resources mentioned in this episode are:
Visit retirementnavigator.com for retirement planning resources and tools.
Check out Benjamin Hardy's book Be Your Future Self for additional perspective on retirement planning.
Consider opening a high-interest savings account for an emergency fund to ensure financial security in retirement.
Explore options for accessing cash quickly in case of unexpected expenses, such as a home equity line of credit.
Don't underestimate the impact of inflation on your retirement savings. Stay informed and adjust your financial plan accordingly.
Seek professional advice from a retirement planning specialist to ensure all aspects of your retirement plan are considered.
Take into account the possibility of living longer than expected and plan your finances accordingly.
Be aware of the impact of debt on your retirement plans and consider the potential changes in interest rates.
Stay socially engaged and active in retirement to maintain a sense of purpose and overall well-being.
Continuously learn and try new things to keep your mind active and engaged during retirement.
Prioritize your emotional and psychological well-being in retirement by identifying your values, purpose, and priorities beyond work.
Don't rely solely on the idea of going back to work if you run out of money in retirement. Plan for financial