Retirement might not live up to your expectations.
Most retirees are prepared for more free time and less stress, but some other aspects of retirement could be unexpected. Many retirees have significant financial worries and health concerns, and an excess of free time is only fun if you use it well. Here are 10 ways retirement might surprise you.
It can be difficult to spend down your savings. After decades of accumulating enough money to retire, it can be psychologically and emotionally challenging to spend down that money and watch your nest egg get smaller each year. “They are going to feel like they spent a lifetime accumulating this pile, and the idea of spending this down is just repulsive to them,” says Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of “Falling Short: The Coming Retirement Crisis and What to Do About It.” “For anyone who is retiring, I would give them permission to spend their money,” she says.
You still need investment growth. Saving enough to retire is not your final goal. You should also develop a plan to make that money last the rest of your life. “You need to understand how you can minimize your risk in the portfolio, but you also need a component of that strategy that gives you growth because you need to stay ahead of inflation and taxes,” says Laura Mattia, a certified financial planner and wealth management principal for Baron Financial Group in Fair Lawn, New Jersey.
Many retirees rely on Social Security. Social Security is a significant source of income for most retirees. Almost all retirees (86 percent) receive income from Social Security, and Social Security payments make up at least half of the retirement income of 65 percent of retirees and comprise 90 percent of retirement income for over a third (36 percent) of retirees. “Most seniors do not have much income other than Social Security,” says Nancy Altman, co-director of the Strengthen Social Security coalition and co-author of “Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All.” The average monthly retirement benefit was $1,282 in December 2014.
Medicare doesn’t cover everything. High medical care bills don’t go away once you qualify for Medicare. Although Medicare covers a large amount of the medical treatments older people need, there are several popular services that it doesn’t. For example, Medicare won’t cover routine eye exams, eyeglass, dental care or hearing aids. And Medicare only covers up to 100 days in a nursing home. Retirees who require additional long-term care will need to find another way to pay for it. And while many preventive care services are covered by Medicare with no cost-sharing requirements, if something concerning is found, additional tests and procedures will be considered diagnostic and copays and coinsurance are likely to apply. “You really need to understand what health benefits you can receive from Medicare and check how it will cover any ongoing health issues,” says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont.
You might spend a lot of time alone. Without a job to go to every day, you could find yourself spending an increasing amount of time alone. Some 44 percent of Americans ages 65 and older live alone, according to U.S. Census Bureau data. Unless you sign up for a volunteer position or make an effort to socialize on a regular basis, you could become bored and lonely.
Many retirees are dating. If you outlive your spouse or divorce, you might find yourself single again in retirement. While just over half (55 percent) of Americans age 65 and older are married, the rest are widowed (28 percent), divorced (12 percent), separated (1 percent) or never married (5 percent), according to census data. Some of these single seniors begin meeting new people and dating. There are a variety of online dating services that cater specifically to people over 50.
Moving can be difficult. As attractive as it sounds to move to the Sunbelt, most retirees don’t relocate for retirement. Only 5.7 percent of Americans age 65 and older moved to a new residence between 2009 and 2013, and the people who do move most often relocate to the same state and even the same county, the Census Bureau found. Only 1 percent of retirees moved to a new state, and just 0.3 percent went overseas. Relocating to a new community in retirement often means leaving behind family and a support system that can be difficult to rebuild in a new place.
You will need help from others. While the act of aging is an expected part of retirement, the loss of independence typically isn’t as welcome. There may come a time when you can’t drive, shovel your own walkway or climb on a chair to change a light bulb. You may even eventually need help with meals and bathing. Although the beginning of retirement is often full of fun and adventures, it’s also a good time to make contingency plans for later down the road when you might not be able to care for yourself.
Retirees watch a lot of TV. Retirees spend over half of their leisure time watching TV. Seniors ages 65 to 74 tune in for 3.92 hours on weekdays, and those 75 and older watch TV for an average of 4.15 hours each day, according to the 2013 American Time Use Survey by the Bureau of Labor Statistics.
You won’t need to hurry. Compared to the overall population, retirees ages 65 to 74 spend extra time lingering over meals, working on home improvement or garden projects and shopping, the American Time Use Survey found. Retirees also spend more time reading, relaxing and volunteering than younger folks.