I made retirement
work and found I was happy!
I was a workaholic,
some called me a type A personality and I thought I needed work to be happy, I
was wrong. The good news is that we generally get happier in retirement so I
was not alone! After the stress of building careers and raising kids, most
people’s happiness seems to actually increase in retirement.
In fact,
you’ll likely be shocked to learn which two ages in an adult’s life are likely
to be at your happiest. Experts from Princeton University and the London School
of Economics and Political Sciences found that happiness peaks at the ages of
23 and 69.
Home
repairs and other unexpected emergencies can wipe you out
The study
found that “shock” events — retirement surprises — had a significant impact on
the assets of many retirees. More than one in three respondents experienced
financial shocks that depleted at least 25% of their assets.
The majority
of retirees are worried about their ability to handle financial shocks:
Home
Repairs: Only 18% of retirees are very prepared to handle home repairs.
Homeownership is expensive.
Where I live the
economists estimate that the cost of homeownership is about 2,000 a month.
This is for repairs, maintenance, insurance and taxes. Many of the most
unexpected repairs are not cheap. From repairing a roof to replacing a broken
furnace or air conditioning unit, home repairs can cost thousands of dollars
and make a serious dent in retirement savings, especially for retirees who are
often still paying off a mortgage.
When retirement
is on the horizon, take a look at your home and consider what major repairs you
might need to make in the next ten to 20 years. Either make them before you
retire or set aside some money to take care of them in retirement.
We were lucky
we had a small inheritance which allowed us to upgrade and take care of many household
repairs, so we are good for at least another 15 years.
If you are
among those worried about potential home repairs, do consider downsizing and
other ways to reduce your housing burden.
Other
surprise bills are car Repairs. According to the Bureau of Labor Statistics in
the UD only 27% of retirees feel very prepared to manage car repairs or
replacement
This
Pandemic made us realize that our family members need our support. We are the
sandwich generation. And, only 8% of today’s
retirees feel very prepared to help family members. If you can before you
retire try setting aside funds for emergencies. It can help reduce worry.
Many
health care expenses will be paid out of pocket
In the United
States, Fidelity Benefits Consulting released its latest retiree health care
cost estimate, and it is again a sticker shock for people nearing retirement.
According to
the report, a 65-year old couple retiring today will need an average of
$280,000 (in today’s dollars) to cover medical expenses throughout retirement,
up from $245,000 in 2015.
These costs
include Medicare premiums, co-payments and deductibles, prescription drug
out-of-pocket expenses. Also, as the report from the Society of Actuaries
notes, most retirees do not have dental insurance and dental expenses are not
covered by Medicare. Routine eye care, hearing aids and the exams for fitting
them are also not covered by Medicare.
In Canada we
have our basic health care covered but we face the same issues as our neighbours
in the US do, in that most retirees in Canada do not have dental insurance and
dental expenses are not covered. Routine eye care, hearing aids and the exams
for fitting them are also not covered.
