6 Things Retirees Can't Afford

     Right now I'm feeling a little cautious, maybe because I'm realizing that I've grown complacent after ten years of good economic times. My retirement funds are flush because of a rising stock market; we've been able to sell our old house and move because of the good housing market; and we haven't had to worry about our kids because they've been working and prospering in their careers. But as we know, all that can change pretty quickly.

     We should keep in mind that we are lucky to be able to retire. It’s an option not available to many others in the world. And except for the rich and famous, it was never available here in America until well into the 20^th century. And who knows if it will be available for our children and grandchildren?

     There are no guarantees that come with retirement -- any more than guarantees come with a job, a marriage or how our kids are going to turn out. All of life is a gamble. So I'd like to reflect on some things we simply cannot afford to do if we want a secure and happy retirement. Let me know if you disagree, or think I'm worrying too much. Or maybe you have other suggestions about what we should be careful about, especially at this time in our lives, as we face another new year.

     1. We can’t afford to ignore our finances. It doesn’t matter how big our nest egg is, or how generous our pension, we have to remember that we could easily live another 20 or 30 years -- all without a paycheck. We will inevitably go through a financial crisis or two, perhaps another bout of inflation. The purchasing power of a pension that looks good today could dwindle if inflation returns. Ask your parents who lived through the 1970s and ‘80s. So we should make sure that our investments are diversified, and if possible that our income derives from several sources -- Social Security, pension, savings, working, whatever -- so if one source runs into trouble the others will pick up the slack.

     2. Or ignore our health. This is right in front of our eyes . . . but sometimes we don’t see it. As we get older, our bodies become less tolerant of injury and more susceptible to disease. An injury we could recover from in two weeks when we were in our 30s now takes two months . . . or it may never fully heal at all. So we should get our checkups, eat right, sleep well, avoid stressful situations, get our exercise. But let's not be foolhardy. Walk or hike, play tennis or golf; don’t go skiing or skateboarding or skydiving unless you really know what you’re doing.

     3. We can't afford not to downsize. We may like our suburban house with its backyard, and there are probably sentimental memories attached to it as well. But we are getting older and less able to clean and maintain and improve a big three-or-four-bedroom house, especially if it’s showing its age and may need a new roof and new windows. We don’t want to end up like Miss Havisham from Great Expectations – rattling around in a big old white elephant that’s falling down around our feet.

     4. Or not to plan ahead. Retirement is not a destination; it’s a starting point. We may have planned out our retirement lifestyle and think that all those decisions have been made. But life goes on. Maybe you now need to account for your creaky knees or painful hip, and live in a place with a bedroom on the first floor. Maybe your divorced daughter will come back to live with you – or perhaps there’s a grandchild in your family now. Our job is to look ahead, as best we can, and set ourselves up for the most likely possibilities, and then still be able to adapt to new situations.

     5. We can’t afford to lose our friends. Many older people are lonely. They’ve lost some friends; others have moved away; the kids are halfway across the country. So we can't just plan where we’re going to live and what we’re going to do. We have to figure out who we’re going to do it with. B and I moved away from our old hometown, in part because our old friends were drifting apart for one reason or another. Now we've moved to a new town, and we're trying to take the advice of B's older brother who relocated about ten years ago. He told us: Say yes to everything -- to every invitation, every activity -- and eventually you'll find a new and hopefully supportive group of friends. We're still working on it. But we are invited to a Christmas party hosted by one of my new golfing buddies, so we're making progress.

     6. Or take our family for granted. Our kids, or our siblings, may have been around so long that we just assume they will always be there for us. But no law says they can’t move away for a job or a new lifestyle. We need to make an effort to stay connected to our families -- which, in our case, means driving a thousand miles up and down the East Coast, and taking an occasional trip on American Airlines to see the West Coast branch of the family. So before any of us retires to Hawaii or Key West, or possibly another country, we need to think about how we're going to stay in touch with our family. And as B and I are beginning to find out now -- you can never underestimate the pull of grandchildren. For, as I discussed in my last post, we all have the cutest grandchildren in the world!