When people think of retirement mistakes, they tend to think of financial mistakes that are made, but are all mistakes financial related? On this episode of the Retire Once Show we discuss our Top 5 Retirement Mistakes and what you can do to avoid them. All that and more on this episode of The Retire Once Show. A Retirement Podcast designed to help get you to retirement and stay retired.
Transcript is below if you prefer reading.
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- Johnathan Rankin CRPC® CEPA®, Founder & CEO,
- Melissa Rankin - Wealth Management Advisor
- Theorem Wealth Management, Financial Advisor Dallas Texas
- Retire Once Show - 2022 Retirement Podcast Series
1) Retirement Mistake #1 - 1:24
2) Retirement Mistake #2 - 3:41
3) Retirement Mistake #3 - 8:16
4) Retirement Mistake #4 - 11:16
5) Retirement Mistake #5 - 13:41
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We believe that retirement should be enjoyed and not a period of stress. So to help you maximize your retirement, we put together our list of the top five biggest mistakes that we've seen retirees make in retirement. All that more on today's episode of the retire. One show. Hello, and welcome to the retire.
Once show, show designed to help you get to retirement. But most importantly, stay retired. I mean, I was Jonathan Rankin and I am joined by my lovely cohost. Hi, I'm Melissa. And our firm theorem wealth management helps investors who are focused on retirement plan for and get to a successful retirement.
And today we have a very important show for you. What are we going to talk about today, man, the day with all that in mind, we are going to be talking about the five mistakes that are most commonly made and how to avoid them in retirement. That's right. We're going to talk five mistakes that you really want to avoid.
And this is based on our experience in this business, working with retirees for the past 16 years, that's all. So we're going to look back on some of the biggest mistakes that we've seen people make and how you can avoid them. But before we do that, do us a favor, hit that subscribe button. If you're watching this on YouTube, or if you're listening to us on apple or Spotify hit that subscribe button and let's join this retirement paradise, come on, let's have some fun, let us help you get there.
That's where I, so let's just jump right in. Mistake number one. What, uh, what do we have? What is mistake? Number one, mistake is not updating your retirement plan. And the reason why we've identified this as the top mistake that you can make is because most people who get. Did some planning, they, they did some planning before they were retired.
They got to that retirement date and then they just decided I don't need to plan anymore. I don't need to update this thing anymore. And they forgot about it, but it's, it's about updating that plan as big decisions arise. That's one of the biggest mistakes that you can make. I mean, obviously spending too much money in retirement.
That's a big mistake. And so that's the number one, fear is running out of money. How do you know if you spent too much, if you're not updating your plan, how much do you know how you can spend? I see so many people make this, you know, make retirement mistakes. You'll read about, you'll read all about retirement stakes, like taking social security too early, or the, the right withdrawal or tax strategy, you know, avoiding big purchases in life.
But all of those retirement mistakes that you hear about or read about, they can all be boiled back down to. Update your retirement plan. It'll help you avoid a lot of those mistakes. So that's probably the most important one. Absolutely. Because some people, they say that specific purchases like a boat or a timeshare or giving money to your kids, college kids for college or a wedding that all of those things can be a mistake if you're in retirement and you're, you know, you're living off your retirement savings, but it shouldn't always come down to your.
Well, if you're prepared for it, you should be okay to do that. If that's something you want to do, it's just a matter of knowing what you can spend. The, I can tell you right now that you know, Emmy is going to be for this year. And I don't care if that wedding is 15, 20, 30 years away, I'm not paying for it.
Cause I'm not going to like whoever she's marrying. That's just going to be a fact. Well, we'll disagree about that later. So not updating your retirement plan. Mistake. Number one, you can make. Uh, best practice there, make it a routine, whether it's every year, every six months, every quarter, whatever feels right for you, just to make sure that you're updating that on a ongoing basis, that is going to be very important.
So mistake number two, mistake. Number two is having a bad investment strategy, a bad investment strategy. Now we're not talking about just an asset allocation that underperformed, you know, the Dow or the S and P or any sort of benchmark. We're talking about a bad investment strategy. Being too conservative, you know?
And so I see this all the time where people in retirement, they think, well, I need to hold on to all this money so I can invest it in anything that has the potential of volatility or losing money. So being too conservative, well, what are we seeing right now at the pump gas prices are crazy. What are we seeing all over the news inflation?
That's all everybody's talking about right now. And being too conservative will eat away over time. At your assets because you're not keeping pace with inflation. So that's the first part about a bad investment strategy, but also putting all of your money into one investment. Now, one basket, I hate, I hate that saying, oh, Who carries eggs in a different basket?
What if they were golden eggs? If they were your milk and eggs, if it were back in old timey days, and those were how you went to the market and actually paid for things, you'd carry them around. Think about your retirement like that. Not in different baskets, a basket. Who has 12 baskets for a dozen eggs?
I can't even hold on the worst analogy ever. That's often used all eggs in one basket. If someone wants to explain that to me, email us at it's in the show notes, email me and explained to me the L eggs in one basket. Cause I hate that saying, but to that point, yes. Putting all of your money into something of that point, that analogy.
For now, but I'm talking about putting everything into either a concentrated stock, or I see this all the time, especially in volatile markets where you, I run across people, who've put all their money into an annuity or something that ties their money. And I'm not saying annuities are bad. That's not what we're saying here, but putting all of your money into one investment is always a poor decision because you're, you're concentrated.
And with things like annuities, then you have liquidity issues. It's hard to get money out of those things sometimes. So putting all your money into one investment is, is definitely a bad investment strategy. But one thing that we're not referring to is this, isn't talking about diversifying financial advisors.
To me, that's a mistake in itself. I mean, that could be a whole separate show. Like if you had two bad knees that needed surgery, are you getting. Two different doctors with different strategies to operate on those knees. This is my right leg doctor. This is my left leg doctor say, no, you're not going to do that.
You want the same person operating on the same legs with the same overall strategy. You're just, it's a bad thing to have two investment advisors that are advising you completely different. Usually in a vacuum, where are. They're focused on their piece of the pie only, and not looking at the overall holistic life of your finances.
So, um, like a true financial plan, absolutely within. So when we're talking about putting all of your money into one investment, we're talking about an investment investment vehicle, but then also a bad investment strategy is just not sticking with a strategy. You mean getting. Overly antsier excited or scared of anything and kind of, oh, now I'll do this.
I'll do that. Like we talked about in our last episode, becoming emotional and panic selling, you know, but it's not just panic selling on the downside. It's, you know, when things are falling in and you're deciding, I just want to sell everything. It's also on the upside too, when the market's going up and everything on the news is about a investment or a stock that is up, you know, 150% or whatever it be.
I mean, remember the meme stocks of last year when they were four or 500% in just a few months, getting out of you stepping out of your risk tolerance, because it seems like everybody's making money easily. It's also a bad strategy. So following suit. Yes, exactly. So just, you know, best practice there, stick with a plan, figure out a strategy that worked for you that fits within your retirement plan.
And just stick to that over time, don't become emotional. Don't become too conservative because you know, you're going to have to have long-term growth. So that is mistake. Number two. So now, now we're in digging into the mistakes that we've run across that aren't really financial related. So what are it, tell us.
So the next one, that again, not really financial related ignoring your health, health is so important and it's even more important when you're retired diet and exercise. Those things sound like bad words. And when you're retired, you probably don't really want to think about it. No, not at all. And just a as we all know, rule of thumb diets always start on Mondays.
So. But getting active can actually increase your immune system and it gives boost your immune system. But that doesn't mean we're not advising going out running marathon. Don't do that. Maybe start off small with a walk. You don't have to go out and deadlift and, you know, lift a bunch of heavy weights and maybe a personal trainer is not in your retirement budget.
That's okay. Look on YouTube for home workouts that you can do at home. We're on YouTube. Our kids are raised on YouTube with, uh, things like Blimpie, YouTube kids. Yes. But they, I mean, if you don't want to work out at home by yourself, you can look into things like class pass, where you can get involved in group settings, but getting active is going to be very important.
And then talking to your doctor about supplements, whether it's calcium or vitamin D multivitamins, you know, making sure that you're looking at your health and not ignoring that. I ignore my health all the time and she gets mad at me. Yes. But I'm also not retired. And I know that eventually it's gonna catch up to me.
That's where she lectures me on. So I try to get better, but also you want to eat healthier too. And this is not fad dieting here. This isn't cut all carbs and got a lifestyle show by any means. We're just saying that these are things that can also impact other facets of your. That have to do with your retirement, that you may not realize.
Yep. And if you're not taking care of your health now, eventually it's going to cost you a lot more money down the road. Is what's going to eat and your financial plan. So what will impact it? Exactly. So getting healthy and at least just getting healthier, going for walks things. And I'm dad, if you're listening, you are listening.
I am talking to you, go on a walk, stop eating what you're eating. What is this coffee? Uh, how many sugars are in this magical? Eight eight sugars and a bunch of cream. And he's going to watch this and be mad at me for outing him. But it's true. That is not okay, dad. So, uh, most insurance. Providers actually offer programs to help get you started.
And, uh, just one thing to ignore, ignore that food pyramid that we all grew up on that is a little out of date. How many servings that you need in all of these different categories combined, it's pretty much wrong, but this will help. This will help one, the quality of life that you have in retirement, but two, it will save you money down the road with health issues that can occur.
So that is mistake. Number three is ignoring your. We got from mistake number four. Oh, this is a fun one thinking you're going to die sooner than you do. So I came up with that one because I wrote across that all the time. Well, I talked to people who, every time we run a financial plan and we forecast it out for age 95 or a hundred, the first thing they say is I'm not going to live that long.
Not going to live that long. There's no way I want to make it past 80 or 75. Now we talked about the longevity calculator before we're going to link to it again to the show notes. So check that out. But advancements in medicine, getting people are getting healthier and you know, all of that leads to longer life long lives.
I was going to say life is, but that's not a word. So a longer life, a longer life. We're going to leave that in just so you know, we're not editing that out. So the biggest problem that you could do is ignore longevity because that might be. Actually impacts the decision-making process. And that's where this becomes financial.
If you don't think you're going to live until you're age 80 well decisions like, you know, when to take social security are going to be impacted decisions like major purchases or impulse buys that you might have. Some people might think, you know, I'm going to buy that new boat or a car or whatever that large purchase, because I'm not going to be around for all of this money anyway.
So I might as well get it now, but by that might. Costing you, if you do live until you're 80, 85 or 90 years old. So, um, making sure that you have money that is there is spread out over the course of your life. And you're planning for that is going to be important planning for a few variables along the way.
I mean, Best case scenario. Everybody lives to be a hundred, obviously, but have a good idea of where you stack and rank with your retirement plan at each kind of stage every few years. But that goes back to our first point. I mean, you need to be updating it often. Can you imagine if we live to a hundred, that means that you will have dealt with me for 77 years, 78 years.
I think I just aged another five. Alright, so mistake number four, ignoring longevity, really something can, you're going to die sooner than you probably are. Uh, it's just, it's going to impact your decisions. Just don't do it. You're probably gonna live longer than you think and start planning for that. So last one, mistake.
Number five. What do we got this actually kind of ties into it a little bit. Living your life and financial fear. Yep. And I, I see this all the time where. Most people, the biggest fear they have in retirement is running out of money. We know that however, when you're laying on your death bed, the last thing that you're probably going to be regretting is having another couple hundred thousand dollars in your bank account, or that you didn't have more money to leave behind to your kids or charity or whatever.
It may be. Most people are going to regret the things that they didn't do. And this is what I see happen with a lot of people in retirement. They didn't take that trip that they wanted to, or spend the time with their grandkids. They wanted, they didn't buy the things that would've gave them fulfillment because they were worried that they were spending too much.
That was maybe counterintuitive to everything we talked about, right. About, you know, making sure that you're not spending too much or impulse buys, but it all goes back to that mistake. Number one of fitting in your retirement plan. There has to be balanced, has to be balanced and you retire for a reason.
I mean, retirement should be enjoyed. It. Shouldn't be this constant living in fear of, I can't do all the things that I want to do because I'm going to run out of money. If you think you're going to run out of money in 15 or 20 years or whatever that time. Go back to that retirement plan and see if that purchase fits.
But there has to be some balance. There are some financial things that actually have two answers, you know, it could be the textbook answer. And the one that actually makes me feel better. And the one I always think about is, do you pay off your home in retirement? You know, if most people are going to tell.
If your interest rates low and you can invest the lump sum, you can get a higher rate of return on the lump sum and yes, by textbook, it makes sense to just not pay for your home and invest in. However, if it makes you feel better by just paying it off and it does not impact your longterm financial plan.
Now that's the important part right there. As long as that decision does not impact your longterm financial plan, then do what makes you happy. Enjoy retirement. You spent decades working. And the reality is that most people in retirement have a short period of time where it's 5, 10, 15 years, maybe, maybe 20 at the most to really enjoy and maximize retirement before health becomes an issue for travel and things that most people want to do.
So take advantage of that time and just know some things, there are two answers where it's okay to do. What makes you feel better, but just make sure that you're going back and not have financially prepared for whatever it is. Either way. There's a lot of mistakes that can be made in retirement and where we touched on just a few, but these are the most common that we found.
The biggest thing that we can always take away from this is go back to your financial plan. That is the top mistake, because if you test every financial decision that you are going to make every big major decision. Now, obviously if you're getting a coffee at Starbucks that doesn't need to be plugged into your financial plan, but unless you do every day and unless you do everyday or in less, you're going to be taking.
Trip around the globe and it's going to cost you $50,000. That should be back here, but the big things use your retirement plan as a mistake checker, the way I like to look at it, avoid it. You can avoid a lot of mistakes. If you put a lot of your big financial decisions into that retirement plan and see what happens or the next 10, 15, 20 years.
Those are the top five mistakes that we've run across in our experience of doing this. Uh, thank you for watching before we get out here to make sure that you subscribe to the show for Washington YouTube. And if you're listening to this on apple or Spotify hit the subscribe button rate at five stars.
Everything we talked about is in the show notes below, and lastly, you can head to retire once show.com, where you can access everything we talked about as well. That is our show for today. I am Jonathan Rankin and I'm Melissa Rankin. Thank you for joining us. With a group of investment professionals registered with sanctuary securities, Inc number FINRA and SIPC.
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