The Worst Things You Can Do When You Retire

man and dog sit together on the beach at sunset
Make smart decisions when you retire. |

The road to retirement requires a lot of planning and a little luck. If you’ve planned appropriately, you’ll have many years to relax and enjoy life. However, you have to be careful that you don’t overdo it when it comes to living your best retirement life. If you don’t make wise decisions, you could end up in a bit of financial trouble and find yourself on your way back to the rat race. Here are seven of the worst things you can do when you retire.

1. Lead a sedentary lifestyle

Sure, this is a time for you to finally relax, but you shouldn’t stay on the couch all day. Take time to get up, go outside, and get some fresh air. If you relax too much and start to lead a sedentary lifestyle, you’ll put yourself at risk for developing a chronic illness. So instead of using all your time off to put up your feet and catch up on your favorite shows, get active. Many senior centers or local community centers offer exercise programs for older adults. Check with your state’s Department on Aging for details.
Next: Hey, big spender.

2. Blow through your savings

Sad man looking at his wallet
Now is not the time to go on spending sprees. |

You’ve scrimped and saved for your entire career. But now is not the time to go on spending sprees. Once you’ve decided to leave work for good, it’s important to spend wisely. It’s not a good idea to just spend whatever you want, whenever you want.
As a general guideline, financial experts generally recommend withdrawing 3% to 4% from your retirement savings each year. This means you withdraw 3% or 4% (whichever you decide is best for you) from your portfolio during the first year of your retirement and then gradually adjust your withdrawals each year based on inflation and current market conditions. Remember, however, this rule doesn’t work for everyone, especially if your portfolio contains more high-risk investments than your average index funds and bonds.
Next: Don’t get lonely.

3. Isolate yourself

Senior man sits fishing in a lake
Spend time with friends and family. |

Although most people feel very happy and relieved to have more time to themselves, retirement can also be a very lonely time. This is especially true if most of your friends, family, and acquaintances are still working. It’s important to make an effort to socialize, so you can reduce your chances of experiencing loneliness and depression.
According to a study by the London-based Institute of Economic Affairs, the likelihood someone will become clinically depressed rises by 40% after retiring. Unfortunately, untreated depression could lead to an untimely death as a result of suicide. More than 7,000 people age 65 or older died by suicide in 2013, according to Centers for Disease Control and Prevention research.
Next: Make those appointments.

4. Skip doctor’s visits

Doctor and patient
Continue to see your doctor annually. |

Health care can be quite expensive, especially as you get older. The average annual cost for health care for those 65 and older is $5,248. Some of the highest costs associated with health care include insurance (annual average of $3,592), medical services (annual average of $932), and medicine (annual average of $550), according to the Bureau of Labor Statistics Consumer Expenditure Survey.
Despite the high costs, you should still make an effort to take care of your body. Getting sick will make your medical expenses even higher, so at the very least schedule an annual physical exam with your primary care physician.
Next: Is the spark gone?

5. File for a ‘gray divorce’

 woman sitting in bed
Is it time to call it quits? |

Unless things are unbearable between you and your spouse, you’re better off trying to make things work. Getting a divorce at this stage in your life could have a negative impact on your retirement savings. Depending on how long you were married, your spouse could be entitled to some of your retirement savings as part of the divorce settlement. All your spouse has to do is seek a qualified domestic relations order.
Next: Don’t start handing out cash.

6. Lend money to friends and family

man being handed money for work
You won’t get your money back. |

It’s tough when friends and family fall on hard times. Things can be going really well, and then the next thing you know a family member’s partner dies, someone loses a job, or some other financial emergency knocks them off their feet. Although you might be very concerned about your friend or family member, it’s not the best idea to start handing out cash to everyone in need. You’ve got to think about your future and how financially supporting a loved one could affect your own finances.
Next: Do you really need that?

7. Make a big purchase

A happy senior couple sitting on the front of a sail
Do you really want to buy a boat right now? |

Although it’s nice to spend money on yourself every now and then, you have to be really careful about how you spend during retirement. Don’t forget you’ll be on a fixed income. It’s probably not such a good time to buy that Porsche you’ve been eyeing or decide to renovate your entire home on a whim. Unless you’ve been saving all along, your days of purchasing big-ticket items on the fly are over.
Next: How to budget wisely

Making sure you don’t run out of money

woman hand putting coin into piggy bank
Plan ahead. |

There are no guarantees in life, but the best way to give yourself a better chance at preserving your nest egg is to plan ahead. That means saving and investing wisely and working with a financial planner now to make sure you’re on the right track. This way, once you do finally call it quits you’ll have enough money for your needs and some of your wants, as well.
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