Retirees enjoy over seven hours of leisure time per day, according to 2019 data from the American Time Use Survey. They use their newfound free time in a variety of ways, including taking up new hobbies, relaxing at home, watching TV and lingering over daily activities. Many retirees also continue to work or volunteer.
For many people, the hardest tasks in retirement are establishing a structure and personal relationships to replace what they had in their work environments. Work dictated the structure of their days and weeks for decades. In retirement, that structure has to be replaced.
Once you have an estimate of your annual retirement spending, you can begin to work out how much you need overall by multiplying your annual spending by the number of years you expect to spend in retirement, figuring in an extra 3% per year for inflation.
What did retirees miss most? According to the study, 65 percent said they most missed interacting with co-workers, friends or students at work.
“Some people may prefer educational hobbies such as learning a new language, while others may like to take a pottery class. Other people enjoy group activities such as learning a new dance, such as how to salsa, while others may prefer more cerebral activities, such as participating in a book club.”
Travel ranks near the top of a lot of what to do in retirement wish lists. Some retirees have a certain city they've always wanted to visit. And for others, a more consistent schedule of travel is a lot more exciting. You don't have to cross an ocean to have a great travel experience.
December 31st is always a popular retirement date, but this year, 2022, it's especially popular – because this year December 31st is also the last day of a pay-period, and last day of the month, and the last day of the leave year – a trifecta!
The retirement bucket strategy divides your retirement income into three buckets: short-term needs, mid-term needs and long-term needs. The goal is to have your income needs always met, regardless of market volatility.
The Harvard study found that housing, at a national average of $17,454 annually for retirees in 2021, remains the highest cost for the average retiree. Housing includes rent or mortgage payments (including principal, interest, taxes, and homeowners' insurance).
A good retirement income is about 80% of your pre-retirement income before leaving the workforce. For example, if your pre-retirement income is $5,000 you should aim to have a $4,000 retirement income.
The overwhelming majority of retirees say that all four pillars—health, family, purpose and finances—are essential to optimizing well-being in retirement.
Retirees are often advised to stay busy and do something meaningful. For the most part this is good advice. No one wants to feel bored and useless in retirement. But sometimes it's nice to just relax and do absolutely nothing.
There are different reasons why you may feel depressed after retiring. For instance, you may feel that without a job to go to, you no longer have a sense of purpose. Or, you may not be spending as much time with friends and family as you anticipated, which could cause you to second-guess your retirement plans.
Inflation, sequence of returns, unfilled income gaps, market risk, interest rate risks, taxes, long term care expenses, rising health care costs, technology and medical advancements are all real concerns that you need to think about. These are without a doubt the biggest retirement challenges.
The most frequently cited retirement fear is “outliving my savings.” Fifty two percent of all workers (young and old) say that they fear outliving their savings and investments, and 42% are concerned that they will not be able to meet the basic financial needs of their household.
However, if I was to retire, I would probably retire at the beginning or mid-December – leading into the Australian summer holidays and festive season. Is there really a better time to live in Australia!? December is probably also the most common time in the financial year to retire, too.