2680: 5 Things No One Tells You About Retirement That You Need to Know by Janet Berry-Johnson with New Retirement

[00:00:00] There y'all, I'm Adrian and I just used a self-directed IRA to buy shares in my buddy's

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[00:00:20] myself.

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[00:00:55] This is Optimal Finance Daily, Episode 2680.

[00:01:04] Five Things No one tells you about retirement that you need to know by Janet Berry Johnson

[00:01:09] with newretirament.com and I'm your host and personal finance enthusiast Diana Mariam.

[00:01:15] Now let's get right to it and continue optimizing your life.

[00:01:23] Five Things No one tells you about retirement that you need to know by Janet Berry Johnson

[00:01:28] with newretirament.com.

[00:01:31] The plans seem simple, work until age 65 and then retire and enjoy the good life, golfing,

[00:01:38] travel, gardening, being a grandparent and sleeping in.

[00:01:41] This may be what you've been looking forward to for the last 40 or so years but you could

[00:01:45] be in for some big surprises.

[00:01:48] There are quite a few important facts about retirement that no one talks about.

[00:01:52] Some people have trouble adjusting when they exit the working world and try to begin

[00:01:56] a life of leisure.

[00:01:58] Here are five things you need to know that most people don't talk about related to retirement.

[00:02:04] Number One Depression is common.

[00:02:07] For many people their identities have become wrapped up in what they do for a living.

[00:02:12] When their careers end, unless there's something else to fill that space, depression can

[00:02:16] become an issue.

[00:02:17] A report from the Institute of Economic Affairs shows that retirement may increase your

[00:02:22] risk of clinical depression.

[00:02:24] Two of the biggest contributors to that statistic are social isolation and inactivity.

[00:02:30] That's why so many experts on the mental health aspects of retirement recommend coming up

[00:02:35] with a plan for retirement that goes beyond your finances.

[00:02:39] Few people like to talk about depression, so it's no surprise that it's one of the things

[00:02:43] that no one tells you about retirement.

[00:02:45] When you retire what will motivate you to get out of bed and do something?

[00:02:50] To ward off feelings of disconnect and despondency, stay in shape.

[00:02:55] Remaining active as you age helps your physical health and your mental well-being.

[00:03:00] Get up at the same time each day and develop a routine.

[00:03:04] Retirees fare better when they have a plan for the day, even if it's just meeting up

[00:03:08] with friends or hitting the golf course.

[00:03:11] Give back to others.

[00:03:13] Seniors who volunteer have a greater feeling of mental well-being than those who don't.

[00:03:18] Feelate your mind.

[00:03:21] Retirement doesn't have to be all leisure.

[00:03:23] Some of the happiest retirees continue working a reduced schedule or pursue higher education.

[00:03:30] Retire to something, not just to get away from the daily grind.

[00:03:34] And find purpose.

[00:03:36] Number two, divorce rates among retirees are skyrocketing.

[00:03:41] A study from the Pew Research Center found that the divorce rates are climbing for Americans

[00:03:46] who are age 50 or older.

[00:03:49] Among US adults age 50 and older, the divorce rate has roughly doubled since the 1990s.

[00:03:55] One of the reasons for the increase in divorce among retirees may be that we're living

[00:03:59] longer.

[00:04:01] When you reach retirement age, you may have decades of life ahead of you.

[00:04:06] Many people decide that they don't want to spend that time with someone they don't

[00:04:09] get along with anymore.

[00:04:11] That combined with a reduced stigma surrounding divorce, both from a religious and societal

[00:04:16] perspective means people are less likely to stay in a marriage they no longer find fulfilling.

[00:04:22] However, it's important to consider the financial aspects of divorce, add or near retirement.

[00:04:28] Older divorces tend to be less financially secure than married or widowed adults, especially

[00:04:34] women.

[00:04:35] In some cases, the leader of women divorces, the more likely she is to need to continue

[00:04:40] working full-time leader in life.

[00:04:43] Suddenly, the nest egg that you thought was sufficient to support a comfortable retirement

[00:04:47] doesn't stretch far enough because it needs to support two separate households.

[00:04:52] When creating your retirement plan, be honest about your future prospects.

[00:04:57] If you fear that a breakup could possibly be in your future, look hard at what that might

[00:05:01] do to your finances.

[00:05:04] Number three, some retirees drink too much.

[00:05:08] Some people leaving the working world feel like they've lost their status, identity, social

[00:05:12] support or their purpose.

[00:05:14] In some cases, these feelings of loss lead to an increase in alcohol consumption and

[00:05:19] even alcohol abuse.

[00:05:21] Some studies have even shown that drinking alcohol is increasing among the elderly.

[00:05:26] In general, the CDC recommends limiting drinking to no more than one drink per day for women

[00:05:31] and two drinks per day for men.

[00:05:33] But even that amount can be too much for some.

[00:05:36] As people age, they often become more sensitive to the effects of alcohol, and heavy drinking

[00:05:41] can make some health problems, such as osteoporosis and high blood sugar even worse.

[00:05:48] Drinking and taking certain medications, even over the counter medications or herbal

[00:05:52] remedies, can be dangerous or even deadly.

[00:05:56] Number four, you might spend more than you have budgeted.

[00:06:00] Traditional retirement planning recommends aiming for 80% of your pre-retirement income each

[00:06:05] year to maintain your quality of living in retirement.

[00:06:08] The thinking is that once you retire, certain expenses, including housing costs, commuting,

[00:06:13] dining out, payroll taxes and retirement savings will decrease.

[00:06:18] However, households end up spending more than what they've budgeted for, especially early

[00:06:22] in retirement.

[00:06:24] That overspending is not typically on necessities, such as food and healthcare, but on discretionary

[00:06:30] spending, such as travel and maintaining a more expensive home than they need.

[00:06:35] It's understandable that after a lifetime of working, new retirees may want to treat

[00:06:39] themselves a bit.

[00:06:40] However, overspending in the early years of retirement can significantly increase your

[00:06:45] chances of not having enough to last a lifetime.

[00:06:49] Even the best-laid retirement plans can come unraveled if you aren't proactive about setting

[00:06:54] a reasonable budget for retirement spending and sticking to it.

[00:06:58] And the more detailed the better.

[00:07:01] Number 5.

[00:07:02] Most people report being happier than ever before.

[00:07:06] With all of the data on depression, drinking, divorce and overspending in retirement, it's

[00:07:11] easy to believe that retirees are some of the most miserable people on the planet.

[00:07:15] That's far from the truth.

[00:07:17] Age wave and Bank of America mirror Lynch recently partnered on research that found that

[00:07:22] a majority of retirees, 93%, feel their life is as good or better than it was before

[00:07:28] they retired.

[00:07:30] What's not surprising about that finding is that money is not the primary factor in a

[00:07:35] happy retirement.

[00:07:37] Regardless of net worth, most retirees enjoy the increased flexibility and freedom that

[00:07:41] retirement brings.

[00:07:43] No matter how little or how much money they have, 86% of retirees report enjoying inexpensive

[00:07:49] leisure activities such as reading a good book, hiking a nearby trail and spending time

[00:07:55] with their grandchildren.

[00:07:57] And an article for Inc. author Jeff Hayden summarized some of the behaviors and characteristics

[00:08:02] that lead to the happiest retirement.

[00:08:04] According to financial advisor Wes Moss's book, you can retire sooner than you think.

[00:08:10] Among those.

[00:08:12] Happy retirees own homes averaging $300,000.

[00:08:16] That's less than the current average sales price for new homes in the US, so owning luxury

[00:08:21] real estate is not necessary.

[00:08:24] Retirees own their homes or are about to pay off their mortgage.

[00:08:28] Owning your home outright provides a sense of security and frees up money for other purposes.

[00:08:34] And happy retirees have 3.5 core pursuits.

[00:08:38] That's activities and interests they love to pursue, which might include volunteering,

[00:08:43] traveling, sports or other hobbies.

[00:08:46] Financial planning for retirement is essential, but just as important is planning for the

[00:08:50] aspects of retirement that money can't buy.

[00:08:54] Social connections, a sense of purpose and passions beyond your career.

[00:08:58] As you near retirement age, start focusing on how you'll use your newfound flexibility

[00:09:03] and freedom.

[00:09:04] You may encounter a few unexpected twists along the way, but the more you plan for the

[00:09:09] soft side of retirement, the better prepared you'll be to confront those inevitable bumps

[00:09:13] in the road.

[00:09:18] You just listen to the post titled, 5 Things No One Tells You About Retirement That You

[00:09:23] Need To Know by Janet Berry Johnson with New Retirement.com and I'll be right back

[00:09:29] with my commentary.

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[00:11:09] The stats around depression and retirement don't surprise me.

[00:11:12] Our individualistic culture really glorifies work, and it's where many of us find a sense

[00:11:17] of self and even self-worth.

[00:11:20] Most of the time when we meet someone new they ask us what we do.

[00:11:23] Work is one of the main ways we find community and relate to other people.

[00:11:27] So taking this away can cause an identity crisis and be really disorienting.

[00:11:32] As much as we think we would be happier not working, I think many of us overlook the

[00:11:36] role that work plays in our lives.

[00:11:39] I was first confronted with how much my job played a role in my identity when I walked

[00:11:43] the Camino for two months.

[00:11:45] For those not familiar this is a 500-mile trek across northern Spain and I took a sabbatical

[00:11:50] from work in 2017 to do it.

[00:11:53] It was unpaint sabbatical and I was completely inaccessible to my employer so it really gave

[00:11:58] me a chance to unplug.

[00:12:00] What was interesting to me is that no one on the trail asked me about my job.

[00:12:05] Most people I met wanted to talk about the deeper questions of life.

[00:12:08] On that trip I got to see a side of myself that was independent of my career ambitions

[00:12:13] and it was eye-opening.

[00:12:15] It definitely expanded my perception of myself and helped me get in tune with ambitions

[00:12:20] beyond work.

[00:12:22] Walking 500 miles across the country was pretty ambitious after all and it had nothing

[00:12:26] to do with my career at the time.

[00:12:28] I highly recommend giving yourself experiences that can remind you that there's more to

[00:12:33] life than work.

[00:12:35] And that'll do it for today, have a great day and start to your weekend.

[00:12:38] Thank you for listening and I'll be back here tomorrow where your optimal life awaits.