Most people think you only talk with a financial advisor about money. However, there is another thing that you should discuss. Your health should equally be addressed and considered when planning for retirement. If you aren’t healthy enough to enjoy your money, you probably aren’t living your dream retirement. To be even more blunt, if you are dead, you get the point. Keep reading as we share four financial mistakes that could ruin a dream retirement plan.
Your healthspan will play a major role in how much joy and happiness you get from your retirement.
1) Ignoring Your Health Span
Most of us have learned to think about our lifespan. That is, how long we will live rather than our health span, which is how long we can live while staying healthy. I joke that I want to live to 120, but I only want to live anywhere near this age if I’m still healthy enough to enjoy life.
I’m currently reading “Outlive” by Peter Attia, which goes way more in-depth about how to live a longer and healthier life. Let me share two simple but life-changing tips from the book. First, start thinking about these health things now. You can avoid many ailments/diseases for a long time if you make healthier choices today. The second tip is to eat more natural food. Without trying to win the debate on which way of eating is best (Vegan, KETO, Mediterranean, fasting – the list goes on), it shouldn’t be too controversial to say eating more whole foods (the less processed, the better) will help you improve your health.
I don’t know what your dream retirement looks like. But in over 20 years as a retirement planning expert, I’ve never heard anyone tell me they are looking forward to spending much time in a nursing home or hooked up to a dialysis machine. Choices you make today could improve your life and decrease the chances of health-related issues ruining your retirement.
If you choose to work in retirement that is great, but you want it to be a choice not a necessity.
2) Running Out Of Money In Retirement
Running out of money is one of the biggest fears facing retirees. Going broke at 80 would dampen the outlook for the remainder of anyone’s retirement. If you are still working, increase your contributions to your retirement accounts. You will likely need to become a 401(k) multi-millionaire to maintain your standard of living in retirement. If you are already retired, make sure you have a spending plan that minimizes the chances of running out of money before you run out of life.
Some of my clients have chosen to work in retirement (they love what they do). Each one always says it is so much better when they choose to work rather than needing to work to pay bills.
While you might not live to 100, you might live longer than you think you will.
3) Underestimating Longevity
If you retire and die the next day, longevity, healthspan, and running out of money won’t be much of an issue. However, the average life expectancy of the average American may lead you to think your retirement may be much shorter than it will be, especially if you are someone leading an above-average healthy lifestyle. I’ve known people who smoked and drank and died of old age at 99 years old (not that common, but it happens).
It may sound counterintuitive, but every year you live, your life expectancy increases. On average, a male who is 65 years old today can expect to live to be 83. For females, the life expectancy is 86. Still, the average American male life expectancy is 73 years, and the average for females is 79 years.
Related: What To Know About Taxes In Retirement
An elderly man making a toast to his family and friends at a barbecue.
4) Retire From Work, Not To Something Else
For many Americans, our careers are part of our identities. If nothing else, we spend a good 40+ hours per work working somewhere. Have you considered what you will do with all that extra time once you retire? Some of your favorite activities may be great when you can only do them on weekends. Do you want to sit on a beach seven days a week? Will you grow tired of golfing after a few too many rounds? I love to travel, but I’m happy to be home after even the most fantastic vacation.
If you need extra motivation, a lack of meaning in life can increase your chances of death. Following your passion or finding hobbies you enjoy could bring you joy and help extend your life.
Explore ways to fill your time once you retire. The happiest retirees I know have retired to something. Some retirees are busier than ever. Others find second careers with less stress or responsibility. Take the time to find out what is right for you.
Living a healthier lifestyle can be a double-edged sword; if you live longer, you will increase the time your retirement income needs to last. Conversely, making healthier choices today can boost your health span and help make your retirement more enjoyable. Take steps today to improve your health, and work with a fee-only fiduciary financial planner to ensure you have a plan not to outlive your retirement income.