Retirement can be one of the most exhilarating times of your life.

Between creating new memories, spending time with loved ones and doing what you want when you want, retirement can be truly fulfilling. Unfortunately, there are some issues to retirement that are seldom discussed. We, at Retire Safety First believe that you should be made aware of these truths so you can prepare and have the dream retirement you have always wanted. Now is the time do more of what you love with the people you love. Knowing you may face some of these challenges, will better help you transition smoothly into retirement. 

1. Your Net Worth Means Nothing When You Retire



This may seem like an absurd statement on the surface because you have spent your whole life saving and preparing for retirement. Often when preparing for retirement the goal in mind is around how much should be saved. Unfortunately, while maintaining your retirement, this is not very helpful.

You need to work backwards and figure out what you need on a per month basis to be confident that your monthly expenses will be covered. With the Retire Safety First Approach, you will know your monthly bills are covered so you can maintain your lifestyle throughout retirement. Without using this approach, you could find yourself living a stress filled retirement unsure of how you will pay your bills as you age.

Click here to learn about the Retire Safety First Approach or call us at 860-757-3644.

2. Taxes In Retirement

Many retirees are often caught off guard by hefty tax bills that come due. This is due to a mistaken belief that your taxes will be lower in retirement which is not always the case.

If your retirement money is within a tax-deferred account like an employee sponsored 401(k) plan, you will have to pay taxes at your regular income tax rate when you take money out. This means you will have to withdraw more than you need just to pay your taxes in retirement.

While some of this may vary depending on your state income tax laws, if you take your Social Security benefits while still working, you could create unnecessary taxable events further complicating your taxes.  

3. You Could Outlive Your Savings



The number one concern for those preparing or already transitioning into retirement, is running out of money, also known as longevity risk. Complicating this is the fact that it is impossible to know how long you will live and how long your savings must last in retirement. Subsequently, you should prepare for multiple decades of retirement so you can maintain your lifestyle because 1 in 4, 65-year-olds will live into their 90’s.

4. You May Have To Continue Working Longer Than Expected

You might have to go back to work after you retire for a variety of reasons or continue working later than you had planned. According to Bloomberg in 1985 the number of retirement age workers was about 10% but in 2019 that number had doubled to 20%.

The reasons may vary as to why you must continue to work but frequently this is due to improper preparation including not knowing how to maximize your Social Security. Taking your benefits inefficiently can cost you tens of thousands over dollars over your lifetime and make maintaining your lifestyle in retirement more difficult than it needs to be.

Request your Social Security Timing Report or call us at 860-757-3644

5. You May Become Bored And Question Why You Even Retired

Transitioning from a typical 9-5 job for 40 or more years, to having an open schedule can be an emotional rollercoaster. Usually during the first year of retirement, retirees are thrilled doing all the things that they did not have time to do while they were still working.

After the first year of retirement, you may find yourself questioning why you retired and wondering what your purpose is. Having outlets to remain social, trying new hobbies and finding your purpose can work wonders in creating your dream retirement.