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Tom and John Mills' Common Cents: Can too much free time be a bad thing in retirement?
Common Cents

Tom and John Mills' Common Cents: Can too much free time be a bad thing in retirement?

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Too much free time can be a bad thing. This is more evident in children, but I have seen it in adults also.

Decades spent in the workforce usually molds adults who can manage themselves. This means that people who retire can do so without losing their minds.

On occasion, otherwise responsible adults don’t retire well. When the structure of employment is gone, some people devolve into a much worse version of themselves. This floundering is often accompanied by terrible money management.

I have seen more than a few people destroy their financial lives within a few short months of retirement. Sometimes people have to return to the workforce for years or even decades to repair the damage.

Here are a few pieces of advice to make sure the transition to retirement goes smoothly.

The vast majority of retirees create some sort of financial plan; this is great. It would be irresponsible not to. However, financial plans have a universal defect.

Financial plans attempt to anticipate the future, which is impossible. It is good to run multiple versions with varying scenarios. Financial plans should also use Monte Carlo type of analysis, which can help account for the unknown.

Retirees must also run more plans as the future unfolds. Before retirement, we make assumptions on future tax rates and spending habits, among other things. Once income taxes and new spending habits become more apparent be sure to run more financial plans.

Another way to test retirement is to live your retirement budget before you retire. Most retirees reduce their pre-retirement spending by at least 25%. If that budget proves to be too restrictive, retirement may be difficult.

Every financial plan will have financial goals, and it is equally important to have non-financial goals.

Those who enter retirement with a set of goals will find their transition easier. Places to see, things to learn and accomplish will serve retirees well.

Many people who work also have a significant social structure around that job. When retirement arrives, some retirees lose friends and relationships, which can be detrimental.

Potential retirees should evaluate their social circle and try and fill gaps that may be left by retirement. Loneliness can lead to some unhelpful behavior and needs to be managed.

Part-time work is one of the most excellent ways to retire successfully. Not only will part-time work provide the needed structure, but it will supplement income.

If you choose to work part-time in retirement, don’t get sucked in too deep. Retirement is a precious time. All retirees will eventually arrive at a point where health declines and travel and other goals become impossible.

Life is what happens when you are busy making plans. That little piece of wisdom is usually attributed to John Lennon, but variations were used earlier by others.


Napan Keiran Cooper, an aspiring videographer and professional yo-yoer, produced this video of himself. (His yo-yo skills can be seen 12 seconds into the video.) Keiran Cooper video


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Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155 or Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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