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Higgins Capital Management, Inc.

10 Surprises Retirees Wish They Knew Before Retiring

Retirement is a significant milestone but it can also come with unexpected surprises. I have encountered numerous retirees who have shared their experiences and the things they wish they had known before retiring. In this video, I will discuss the ten most common surprises that retirees discover after the fact.

Watch the video here:

1. Not having a comprehensive retirement plan: Perhaps the biggest surprise for retirees is realizing that they did not have a comprehensive retirement plan in place. A well-rounded plan should address financial, healthcare, lifestyle, and estate planning considerations.

2. Healthcare costs are higher than expected: Many retirees are caught off guard by the high cost of healthcare in retirement. Even with Medicare, out-of-pocket expenses for premiums, deductibles, and copays can quickly add up.

3. Retirement income may not be sufficient: Retirees often find that their retirement income is not enough to maintain their pre-retirement lifestyle. This can be due to underestimating expenses, overestimating investment returns, or not saving enough during their working years.

4. Failing to update estate plans: Retirees may neglect to update their estate plans, including wills, trusts, and beneficiary designations, after retiring. This can lead to unintended consequences and potential conflicts among family members.

5. Underestimating the impact of inflation: Retirees often underestimate the long-term impact of inflation on their purchasing power. Even a low inflation rate can significantly erode the value of retirement savings over time.

6. Neglecting to plan for long-term care: Many retirees do not adequately plan for the possibility of needing long-term care, such as assisted living or nursing home care. The costs of long-term care can quickly deplete retirement savings if not properly planned for.

7. Unexpected tax implications: Retirees may be surprised by the tax implications of their retirement income sources, such as Social Security benefits, pension payments, and retirement account withdrawals. Careful tax planning is essential to minimize the tax burden in retirement.

8. Difficulty adjusting to a fixed income: Many retirees struggle to adjust to living on a fixed income, especially if they are used to regular salary increases or bonuses. Budgeting and financial discipline become even more important in retirement.

9. Boredom and lack of purpose: After the initial excitement of retirement wears off, many retirees struggle with boredom and a lack of purpose. Without the structure and social interaction of work, some retirees find it challenging to fill their days meaningfully.

10. Strained relationships with family: Retirement can put a strain on family relationships, especially if retirees have different expectations or plans than their spouse or adult children. Communication and compromise are key to navigating this transition.

In conclusion, retirement can come with many surprises, both financial and non-financial. By being aware of these common surprises and taking proactive steps to plan for them, retirees can better navigate the challenges and enjoy a more fulfilling retirement. Working with a qualified retirement specialist can help individuals develop a comprehensive plan and make informed decisions to secure their financial future in retirement.

The information contained in this Higgins Capital communication is provided for information purposes and is not a solicitation or offer to buy or sell any securities or related financial instruments in any jurisdiction. Past performance does not guarantee future results.

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