The Post-honeymoon phase of retirement

The period just after you decide to retire could be considered the honeymoon or vacation phase of retirement. You have all this freedom and spare time, and the energy levels are on a high. You travel frequently, have many hobbies, and socialise a lot. This is probably the one time in your life when you have the most money in your savings. This phase could last a few months or even several years. 

Signs you are still in the honeymoon phase of retirement
•    Overspending on luxuries, vacations, hobbies
•    Renovating your home
•    Socialising
•    Budget tends to get broken most months
•    Spend money on kids and grandkids
•    New car, new house

Like any new experience and change, it takes time to settle into a new life and a new budget. Eventually your budget will balance out and you revert to routines and normal living.
There is nothing wrong with keeping the honeymoon phase going, as long as the budget is kept in check.
Prolonged honeymoon phase of retirement could lead to serious financial problems and shortages. By overspending the first few years, you could be short later on or potentially even run out of money.

How to prevent the honeymoon phase from ruining your later retirement years.

•    Plan for your honeymoon phase – make provision for extra expenses or luxury expenses during the first few years. 
•    Have a separate splurge savings account - this will cover holidays, hobbies or impulse purchases without eating into your monthly budget.
•    A Rainy-day fund will cover emergencies and won’t eat into your budget.
•    Rental income – Renting out part of your home or vacation home could supplement your retirement income.
•    Part time work – if you feel like you still need to contribute to the workforce, a part time job or small business could supplement your retirement income. 

As one gets older you tend to travel less and spend less. Also. Medical expenses tend to increase. This might all seem overwhelming, but your financial advisor will help get your retirement plans in place considering all these factors.csvhelp@devere-group.com

 

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.