12 Things You Should Not Do in Retirement

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You’ve done your homework, and now you’ve got this retirement stuff all figured out. Savings socked away. Debts paid off. A plan in place to transition from work to leisure. Let the good times roll!

However, some retirement mistakes operate under the radar.

Maybe they’re due to that heady rush of freedom in the first year of retirement. Perhaps you want to keep being generous, forgetting that you now have less money. And as we age, certain physical issues can make it harder to be frugal, and certain cognitive changes can lead to poor decision-making.

Here are some unwise decisions that could tank your golden years, and how to avoid them.

1. Forget to create/update legal documents

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When was the last time you looked at your will and estate plan? Things change, and our legal paperwork needs to change along with them.

Maybe a grandchild was recently born, or your sibling died last year. Possibly the son who’d agreed to be your executor no longer feels up to the task.

Or perhaps during the pandemic, you had to sell some of the jewelry you’d planned to leave to your great-niece. If so, make sure those pieces aren’t included in the will, or whoever does end up as executor might pull their hair out trying to track down these mysterious baubles.

And if, heaven forbid, you don’t have a will or estate plan, get going on this yesterday. You’ll find help at “8 Documents That Are Essential to Planning Your Estate.”

2. Fail to budget

A Black man plans his finances on his laptop and with notes
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You’re on a fixed income now, remember? Some costs do go down in retirement. That 40-mile commute will be a thing of the past, and you won’t need to buy and maintain a work wardrobe. But other costs might go up. For example:

  • Medical bills. Sorry to have to tell you this, but Medicare doesn’t cover everything. Among other things, you could have to pay for glasses, hearing aids and most dental work, depending on what Medicare coverage you choose.
  • Household help. If you can no longer do yard work or deep cleaning, you’ll need to ask for assistance. Your grown kids are pretty busy with their own lives so you can’t expect them to use one of their precious days off each week doing outside chores plus your cleaning and laundry. That means this could be a new bill to add to your budget.
  • Food. If health issues require specialized diets, the ingredients could get costly pretty quickly. And if those health issues make it tough to cook, you might wind up relying on takeout or meal delivery services, which are much more expensive than from-scratch meals in your own kitchen.
  • Home modifications. Illness or the cumulative aging process might create the need for things like grab bars in the bathroom or a wheelchair ramp out front.

This doesn’t mean you’re doomed. It just means you need to live within a reasonable budget, just as you did when you were working. Keep an eye on monthly spending, either with paper and pen or a service like YNAB (You Need A Budget), which simplifies the process (and automates it to boot). In addition, companies like Trim or Truebill make it easy to find and cancel memberships and subscriptions you’ve decided you can live without.

Spending creep could cause you to take too much out of your retirement accounts or to go into debt because you’re afraid to tap those accounts. Neither one is a good look. If this might be a concern for you, check out “5 Ways to Stop Lifestyle Creep From Stealing Your Retirement.”

3. Slide into debt

Broke man overwhelmed by bills
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Ideally, you’ve planned to go into retirement with zero debt. But it’s all too easy to slide back in, especially if you haven’t created that budget — one that takes into consideration the fact that you’re now on a fixed income.

If you find you have more month than money, it’s time to identify the financial leaks. This likely means making some choices, such as cutting one of your streaming services or cooking more rather than ordering in.

Some overages are one-offs: wedding or graduation gifts, trips to see family, a car repair, an emergency loan to a relative. Others, such as insurance premiums or property tax hikes, are to be expected (but are never fun when they arrive). However, all these things should be factored into your spending plan, under categories such as “emergency fund,” “vacations” and “giving.”

If you’re carrying debt that is overwhelming you, however, consider talking to a reputable credit counselor.

4. Spend fixed income on grown kids

Woman in a wheelchair giving money to her adult child
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Naturally, we want our offspring to live their best lives. Sometimes, however, helping them could jeopardize our own long-term comfort and security.

For example, it’s increasingly common for young people to live in the family home well into their 20s and even their early 30s. Sure, some of them offer to pay rent — but some parents refuse to accept it.

And ask yourself this, parents: Do you regularly drive the “kids” around or let them use your car, pay for their groceries or grab the tab at restaurants? Do you carry your offspring on your phone plan for free or cover the cost of additional streaming services so everyone is happy?

Even when children are out on their own, parents often still help out. According to the Pew Research Center, parents are stepping in to cover both money emergencies and basic expenses such as utilities or even mortgages. Nearly 6 in 10 parents of adult children aged 18-29 report they’ve given their offspring financial help in the past year.

As the flight attendants say, you must put on your own oxygen mask first. Before you help your kids, or your grandkids, take a hard look at your own finances: Can you truly afford to subsidize everyone indefinitely?

Sound harsh? Here’s what’s harsher: Having to contact those adult kids a decade from now to say, “I can’t make my basic bills. Can you send me some money? Or can I come live with you?”

Harshest of all: The possibility that your offspring might not be able to help you, which means you could be facing extreme poverty in your final years.

5. Withdraw too much money

Senior woman counting cash
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Once you’re retired, you might want to do a little of everything. After all, you no longer have to schedule time off for vacations, spa days and the like. Finally, you can buy season tickets to your favorite sports team or subscriptions to theater or dance companies. You can take riding lessons, splurge on fancy kitchen equipment, or beef up your collection of power tools.

But can you, really?

If you claimed Social Security before your full retirement age, you’ll have permanently reduced benefits — and the conventional wisdom is to take no more than 4% out of your accounts each year. Out-of-control spending may cause you to loot your retirement funds faster than you should.

Then there’s the possibility (likelihood, really) of a market downturn during your golden years. With your retirement funds worth less, withdrawing that 4% means the fund will diminish faster.

Having a decent-sized cash cushion can help because it lessens the amount you’ll need to withdraw. Having a sensible budget that allows for some fun — but not all the fun at once — helps too.

6. Become sedentary

Senior man eating cake
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Plenty of people dream of taking it easy in retirement. But you don’t want to take it too easy. A lack of exercise can lead to all sorts of health issues. The National Institute on Aging, part of the U.S. Department of Health & Human Services, reports:

“Often, inactivity is more to blame than age when older people lose the ability to do things on their own. Lack of physical activity also can lead to more visits to the doctor, more hospitalizations, and more use of medicines for a variety of illnesses.”

Being active improves energy, physical strength, balance and sleep. It can help you reach or maintain a healthy weight, reduce stress and anxiety levels, improve cognitive function, and manage or even prevent certain diseases. Taken together, all these improvements could make it possible to live independently for longer, or maybe for the rest of your life.

Vowing to stay active isn’t enough. You need an actual plan in place, such as a daily mall-walking date with friends or a YMCA or health club membership. Recreation centers and colleges could also be sources for affordable exercise options.

Note: Silver Sneakers, a wellness program included free with many Medicare plans, can set you up with fitness videos, live online classes or in-person workouts at more than 15,000 locations nationwide.

7. Let yourself become isolated

Lonely senior looking out a window
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Some people do pretty well on their own, for a time. But prolonged isolation can lead to some serious physical and mental health issues, according to the National Institute on Aging. Among them: depression, anxiety, cognitive decline, high blood pressure, obesity, weakened immune function and heart disease. According to the NIA:

“Older adults are at higher risk for social isolation and loneliness due to changes in health and social connections that can come with growing older, hearing, vision, and memory loss, disability, trouble getting around, and/or the loss of family and friends.”

What to do? Depends on what you like to do. The NIA suggests solutions like volunteering, auditing classes at a college or university, adopting a pet (if you’re physically able), joining an exercise class, restarting an old hobby or taking up a new one, visiting a senior center or the library regularly, staying in touch with family and friends via video chat or other technology options.

8. Always pick up the check

Older women eating at a restaurant
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Parents often grab for the tab automatically, somehow assuming their adult offspring are not yet financially secure. Or they fight with their friends to be the one who pays, either out of genuine affection or supremacy issues.

Stop doing this. Show your love in other ways. Let family and friends know that in honor of your fixed income you will now be asking for separate checks. Or stage a potluck at your house.

9. Fail to ask for senior discounts

A happy older shopper takes advantage of senior discounts
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My partner and I always shop on Senior Day at Kroger, because we get 10% off all store brands, and on Senior Tuesday at Walgreens, where we get 20% off.

A friend’s dentist offers discounts for those older than age 65. Being over 55 gets us senior movie ticket deals. Other retailers and service providers might also give you a price break — but you won’t know unless you ask. So ask.

10. Lend money

Senior protecting his cash
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Sometimes it’s okay, because you know the person is good for it. But sometimes you’ll get stiffed by a relative or friend.

Money Talks News founder Stacy Johnson offers best-practice tips in “Should I Lend Money to My Kids?” (For example, everything should be in writing.)

Remember: They say never to lend more than you can afford to lose. They’re right.

11. Answer the phone

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When “unknown caller” or “out of area caller” shows on the phone display, my partner and I let the machine get it. Nine times out of 10 the caller hangs up; those who leave messages are invariably someone wanting our money.

Let voicemail get it, lest you be talked into giving to your alma mater or double-talked into some kind of scam. And if you’re wondering whether a request is legit, get a second opinion.

12. Give too much

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They say it’s more blessed to give than to receive. But suppose your giving gets out of hand?

Instead of wrecking your own finances, make “charitable giving” part of your budget. Maybe that’s a specific percentage, such as a 10% church tithe. Or maybe you’ll look at the numbers and decide, “I can afford to give away $100 a month.”

Once you’ve reached that amount, stop. Yes, it can be hard with so many emails, social media postings and relatives’ kids selling band candy.

Note: If you find it hard to say “no” in the moment — and who can resist a little tuba player with a box of chocolate? — then set aside part of your giving budget for these spur-of-the-moment requests.

And before you decide to give to a cause, check it out through websites like GuideStar or Charity Navigator. You’ll get an idea of how much of the money actually goes toward helping others. For a smaller or new charity, go to its website to look for an IRS 990 Form, which spells out salaries and expenses.

It’s good that you want to give. But you need to take care of yourself before you can help anyone else.