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You've been a success on the job — here's how to avoid 'failing' retirement

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At a recent meeting with a client family, the husband related that he thought he might “fail” retirement for a variety of reasons.

He told me that he liked his work and found it very fulfilling. He also worried that being home all day with his wife (and not working) would cause some friction. He thought that both he and his wife already had “enough” quality time together and enough to do the limited travel they enjoyed.

Finally, he admitted to having no hobbies or other interests that he thought would fill time.

I found all of this very perceptive. Given all these factors, I thought he was right. As we mostly all live much longer, the concept of retiring for some of us might not make sense at a certain time.

When the idea of retirement was first broached with the idea of Social Security, the average life expectancy was barely above the expected time of retirement in one’s 60s. Now, it is not unusual to live another three to four decades, suggesting that retirement for all in the mid-70th decade doesn’t necessarily make sense.

As part of the financial planning process, we do indeed probe how people contemplating retirement plan to fill their days. We especially focus on this with individuals that are busy and successful in their careers. As a result, we often recommend working longer or considering working part time in some capacity as a transition. We review that using a (perhaps) worn out mandatory time to retire may not be the best course of action.

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Having said all this, we also find many pre-retirees who have many interests and use of time that they literally cannot wait to begin after a working career. These people are much less likely to “fail retirement.”

The other way to fail retirement is to be underfunded.

This is not unusual either. Many people think their savings will be adequate to fund their desired lifestyle when in fact that is not the case. Having a careful review of all sources of income, and a realistic expectation of spending is crucial before jumping into losing your earned income.

We find that most couples spend more in the early years of retirement than they expect (and that they were used to spending), as they now have the time to travel and enjoy both experiences and “things” they buy.

Steve Podnos

Again here, working longer and or a part-time working transition might also help to provide a financial buffer to financial success, and therefore might provide a cure to the two most common causes of retirement “failure.”

I’d encourage most people to avoid retirement planning without considering these two causes of failure. Once committed to leaving work, it might be very difficult to return to the work environment.

Steven Podnos is a fee-only financial planner in Central Florida. He can be reached at Steven@wealthcarellc.com and at www.WealthCareLLC.com.

This article originally appeared on Florida Today: Want to avoid ‘failing’ retirement? Here’s how.