Of all our many financial goals, none takes up more of our time and money than planning for retirement. Many of us spend years, if not decades, thinking about our retirement wishes -- how much we'll need to have saved up, what we'll do, where we'll live, and other factors that will determine how we spend our senior years.
We asked retired Morningstar.com readers on our Investing During Retirement discussion board what they wish they'd known when they first retired. Some of the responses were eye-opening--for example, a few readers said they were surprised to find that some friends and relatives were resentful of their ability to retire--while others were more expected--such as those who cited the financial crisis and other macro-level events that had affected their finances.
Investing Regrets, They've Had a Few
Investing for retirement wishes (hopefully) means positioning one's portfolio for success regardless of market conditions. But even well-prepared retirees could not have anticipated the timing and extent of the financial crisis that came to a head in late 2008. Not surprisingly, several commenters mentioned this as something they wish they could have known about ahead of time.
For bubbygator, it was a lesson learned."I retired at 51 after a goodly paid time in the integrated circuit business,"bubbygator wrote. "Everything was fine for 17 years, then I decided to concentrate [my portfolio] into a high-paying REIT [real estate investment trust] in 2006-07. It went bust. Wow, did I take a loss. Now my first mantra is diversification. I limit my amount in any holding to 10%."
For bujia the financial crisis represents a missed opportunity. "I wish that I had known that when I retired in early 2009 during the depths of the Great Recession that the market was just beginning its current bull run," the poster said. "Much anxiety would have been averted."
Not surprisingly, some retirees expressed their disappointment with Federal Reserve policies that have kept interest rates at or near historic lows for years.
"I wish I had known that the Fed would sacrifice savers for the dubious benefits of trying to 'control' the economy," said RTO31607. "Keeping rates low for such a long time has made it very difficult to buy new (and safe) CDs as older, higher-yielding ones [pay] off. What else is there for very conservative retirees?"
Changing Your Money Mentality
Some posters mentioned the challenge of managing their finances now that they no longer work. TinyTuna, for example, said he wish he'd known "how to get past the shock of not getting any more paychecks."
Not everyone found the financial shift into retirement difficult, however.
Wcdphr's big regret was not knowing "that I could sit back, relax and trust my calculations. I wasted a year worrying about not having a paycheck every two weeks. Now I regret working that last year. I'm not rich, but I can do what I want when I want to. Or do nothing. It's a whole different mindset."
Consider Health, Not Just Wealth
Some commenters cited lifestyle factors such as their health or health costs as something they wish they'd given more consideration.
"I spent much more time planning the financial side of retirement than I did taking care of myself so I would not need medical care," wrote Bill1234. "Turns out that the biggest risk we all face in retirement and the biggest impediment to a happy retirement is our health."
Then there were those, such as REDDn2, who found retirement to be a jolt to their way of life.
"After working steady all my life, I was unprepared for the newfound freedom of not having that daily job to govern me."
Retirement Wishes: Lifestyle Choices Loom Large
Another important consideration for some was geography and, just as importantly, who they lived near.
"Where my wife and I wanted to live during retirement has been the biggest adjustment," said dtconroe. "When I first retired, we chose to live where I had been working for the last 14 years. During retirement we realized we would be happier where some lifelong friends and family were living. I wish my wife and I had made that relocation decision much sooner after I retired."
For many of those leaving comments, it wasn't so much the financial challenges of retirement that had been difficult but some of the emotional ones.
"I had prepared pretty well for retirement, including non-monetary planning, but leaving at 60 was just a little too soon for me and I soon found myself back in the workforce part-time," recalled RZH123. "The freedom is great, but you can start to drift some if not careful. I also underestimated the loss of social connections I had at work. Finding places to replace that in my area has been difficult."
In fact, volunteering in retirement was another popular topic of conversation, with some retired readers saying things hadn't turned out as planned.
For jtwhit1, the problem was overcommitting to volunteer work in retirement. "I should not have become so heavily committed to volunteer activities almost immediately after leaving paid work," Jtwhit1 wrote. "I should have waited and enjoyed the unlimited outdoor recreational activities that have been available to me for at least a year before working at a job that paid nothing."
Expect the Unexpected
Finally, there were those readers who lent a good dose of perspective to the question of what they wish they'd known when they first retired.
"I wish I had known that there really wasn't much of anything that I could know about the future," said annoyed. "After we retired in 1996, so many things happened that seemed completely unprecedented. ... The dot-com crash, the incredible inter-relationship of the various world economies ... 'too big to fail' and what that meant to the entire world financial system, artificially low interest rates that simply crush seniors in retirement, worldwide terrorism and 9/11 and how that changed the world forever ... the list just never ends. In fact, it now seems clear that the one thing someone retiring today can depend on is that the future holds many, many challenges that we can't even imagine. ... What conclusion to draw from this? Those of you who are young, those of you with kids or grandchildren, start thinking in terms of preparing for everything you can think of for your retirement and then leave plenty of room for all of the things that you cannot predict. There are going to be plenty."
