My parents' retired friends live luxuriously thanks to a smart investment move, and I'm planning to follow their lead (2024)

FAQs

What is the disenchantment phase of retirement? ›

3. Disenchantment. Unfortunately, the retirement journey isn't without its challenges. Feelings of unmet expectations, disillusionment and disappointment may surface during this stage, requiring introspection and adjustment.

By far, the most common complaint about retirement is boredom and not having anything to do. Worse, is not having anything to do and feeling irrelevant.

Being retired means having more free time, and many of us begin to think more deeply about things. It's easy to feel lost and wonder if what you've accomplished so far is all you'll ever do with your life. At times, I feel desperate or determined to do at least some of the things I've always wanted to do.

Many retirement planners suggest being prepared to spend about 80 percent of your highest pre-retirement income per year after leaving the workforce. Most people live another 10 to 20 years after retirement, so it's important to think about the long term when planning how much to save.

Retirees can safely spend down retirement account assets at a rate higher than 4% without depleting their savings in old age by monitoring account balances regularly and making tradeoffs like converting some savings into guaranteed income, the two firms found.

Today it centers around four pillars — health, family, purpose and finances. Thought and action about each of these pillars can help in achieving your ideal retirement.

To be considered wealthy at age 65 or older, you need a household net worth of $3.2 million, according to finance expert Geoffrey Schmidt, CPA, who used data from the 2019 Survey of Consumer Finances (SCF) to determine the household net worth needed at age 65 or older to determine the various percentiles of wealth in ...

It's worth noting that most Americans are nowhere near having that much money socked away. According to data from financial services firm Credit Karma, Baby boomers have median retirement savings of $120,000, while nearly 30% of people aged 59 or older have saved nothing for their golden years.

Regret one: a too-late transition to retirement

Regret number one — transitioning too late to retirement — centers on how people stumble when they try to plan how to spend newly acquired free time. “Don't feel you need to have it totally figured out but practice retirement today,” he advises.

The traditional retiree feels a boost in happiness starting around age 57, or eight years earlier than age 65. Therefore, the 45-year-old retiree may start feeling a rebound in happiness perhaps starting as early as age 37.

At what age do most retire? ›

Based on 2021 data, men retire at an average age of 64.7 years, while women remain at work until age 62.1. Retirees at the age of 65 qualify for Medicare benefits. As part of SECURE 2.0, Congress raised the age at which retirees are required to make minimum distributions on select retirement accounts.

The $1,000-a-month retirement rule says that you should save $240,000 for every $1,000 of monthly income you'll need in retirement. So, if you anticipate a $4,000 monthly budget when you retire, you should save $960,000 ($240,000 * 4).

Let's say you consider yourself the typical retiree. Between you and your spouse, you currently have an annual income of $120,000. Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.

The literature on the relationship between retirement age and longevity is still developing. The findings are mixed. Most research shows that delayed retirement helps reduce mortality.

Third Stage: Disenchantment

Once the emotional high of retiring has worn off, and the honeymoon phase is over, many people feel a sense of disappointment and disillusionment. They have spent so much time looking forward to retirement, so once it sets in, it can feel less exciting than it was hyped up to be.

Decumulation is the process of spending down assets you've accumulated over your lifetime in retirement. It involves new strategies compared to the accumulation stage. Securing lifetime income sources like Social Security, pensions, and annuities can provide guaranteed income that lasts as long as you live.

Termination of retirement is when a retired person returns to the workforce. Some people return to the workforce because they need the money, but studies show that the majority of people who return to work after retirement do so because they want to.

Your retirement will evolve over time. Most people go through three stages of retirement: exploring, nesting and reflecting. In the first stage of retirement, while your health is good and you have goals to accomplish, you might travel the world, learn new skills, volunteer and take up new hobbies.