A lot of my friends have parents who are retired, and their post-career experience tends to be mixed. One friend of mine has wealthy parents who retired last year, and since then, they've gone on more fabulous vacations than I can count. Needless to say, they're doing just fine.
But another friend of mine told me that her parents are struggling as retirees. Granted, things were going better for them before the pandemic, but since then, they've stopped doing certain things they used to out of health-related concerns. However, the biggest issue her parents are facing right now is that the fact that after several years of retirement, they're just plain bored of it.
They're surely not alone. Many seniors struggle to stay busy once their careers wrap up and money gets tight.
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The problem, though, is that in the course of financial planning, a lot of people end up overlooking the boredom factor. And it's an important thing to think about before bringing your career to a close.
A major issue for seniors
You'll often hear that many seniors struggle to cover their healthcare costs under Medicare. And because many seniors go into retirement without much in the way of savings, they end up having to make lifestyle cuts, like downsizing their homes.
But boredom has the potential to be just as much of an issue. First of all, it can lead to mental health problems. It's not fun to sit around not knowing what to do with your days -- whether you're retired or otherwise.
Granted, stay-at-home parents sometimes struggle with boredom, too. But for them, the option to return to work once their kids get older is generally on the table. For seniors, holding down a job isn't always an option -- especially for those who have been out of the labor force for quite some time.
Boredom also has the potential to wreck your finances. If you retire and can't cope with being home, you might spend a lot of money to stay occupied. That might cause you to whittle down your IRA or 401(k) plan balance to the point where you start to struggle to pay your essential bills.
That's why the boredom factor is something you must discuss with your spouse or financial advisor in the course of your retirement planning. And if you're planning for retirement on your own, have that conversation with yourself.
Ask yourself what activities you'll do to stay busy and try to estimate their cost. And also, consider the timing of your retirement carefully in light of the boredom factor.
If you're the type who doesn't take well to doing things at home, that alone might drive the decision to retire on the later side. If you're a low-key person who enjoys a lot of downtime, you may be OK to retire on time.
Working can be a stressful thing, but the upside of having a job -- aside from the paycheck, of course -- is having something to do for what could easily be 40 hours a week or longer. When you go from that to no job at all, it can be a very tough adjustment. So think about what it might really mean to be retired, and make sure you have a plan in place to avoid boredom or at least cope with it reasonably.
