When it comes to retirement planning, there are many ways things can go sideways. Some issues stem from a lack of planning while others are the result of misguided intentions. Here are the 3 biggest retirement mistakes:

Number 3: Buying Your Dream Home

You’ve worked hard all your life and now it’s time to buy your dream home. Not so fast. If you are of average means with caviar dreams, your dream home could turn into a nightmare. 

Ever heard of CDD fees? CDD stands for Community Development District. CDD fees are monthly amounts tacked onto your mortgage payment to fund utility infrastructure. They were unheard of a generation ago, but now they are standard procedure on virtually all new homes. Another buzz-kill are Homeowners Association fees. HOA fees pay for your neighborhood’s clubhouse, pool, and other amenities.

EGGSTACK RETIREMENT PLANNER

CDD and HOA fees can run anywhere from $50 to $800 per month, each. That is money down the drain. Unlike principal paid on your mortgage, CDD and HOA fees do nothing to pay off your mortgage or increase your net worth.

There are other burdensome costs lying in wait at your dream home. Things like higher property taxes, increased maintenance costs, and higher utility bills. In certain neighborhoods, you have to join a country club before they will let you move in. The initiation fee is thousands of dollars plus there are ongoing annual dues.

Housing costs increase in proportion to a home’s value. The bigger and more expensive the home, the higher the cost of everything that comes with it. 

You might want to rethink buying the house of your dreams. If the initial purchase is a stretch, the ancillary costs might break you. The number one reason people downsize in retirement is because they bit off more than they could chew on their dream home.

Number 2: Moving to the Country

Whether it’s majestic mountains or sprawling countryside, there’s something about retirement that makes us yearn for wide open spaces. We long to trade the hustle and bustle of the city for the peace and quiet of nature. Just thinking about it warms your heart.

Wake up! That same heart might need surgery one day. If you live out in the boondocks, your options will be limited to Bubba’s General Store and the retired veterinarian over in the next county.

Don’t move away from good healthcare at the exact point in your life when you’re most likely to need it. Settle for whatever country you can find in the orbit of a major city, someplace not more than 45 minutes from a good hospital.

Number 1: No Purpose

That brings us to number one in our list of the 3 biggest retirement mistakes: no purpose. If you arrive at retirement with no plans, no hobbies, nothing you enjoy doing, and no idea how you are going to spend the vast expanse of time that lies before you, you are in trouble. 

You may fall into the habit of watching cable news all day and yelling at kids to get off your lawn. Is that how you want to spend your retirement?

We have covered at length countless ideas and suggestions for having a happy and fulfilling retirement:

Retirement Disposition: Grouchy or Great?
Reinvent Yourself in Retirement
The Road to Success
Healthy Aging
Start a New Hobby
10 Tips for a Successful Retirement
What's on your Bucket List?

Conclusion

As with life, retirement is what you make it. You get as good as you give. We encourage you to spend some time planning it. Not only the financial part, but in other ways as we’ve touched on here. Don’t cheat your future self by giving little or no thought to retirement. It's the last chapter of your life, make it a good one.

Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.