What If Your Retirement Plan Falls Apart When You Get There?

This is a true story that is happening to one of my long-time clients. This client, we’ll call her Betty, had worked hard in her career, and planned for her retirement carefully. She knew her retirement numbers including her income floors, when she would take Social Security and what she could comfortably spend in retirement and not worry about running out of money. Her vision of her retirement life was clear and detailed. Betty knew where she wanted to live, what she would be doing and who she would be doing things with. She was ready. And then her plan fell apart.

After she retired, Betty sold her house and moved to another city to be near family. Three months after moving, Betty was miserable. Not un-happy as in the grocery store is too far away, but miserable. She didn’t like the new house she bought. The work needed on the house was going to cost more than anticipated and finding a contractor was difficult. The neighbors and neighborhood were not what she expected, she didn’t feel secure or safe. Even though she had visited the new city several times, the weather was terrible for Betty. In other words, she KNEW she had made a mistake.

Betty sold her new house at a deep discount so she could get rid of it quickly, packed up her belongings and shipped them back to the area she had left just three months earlier. The cost to move twice in three months was high and Betty is renting a house now until she figures out her next move. I don’t know how Betty’s story will turn out because it’s un-folding as I write this.

What can we learn from Betty’s journey? There are at least six lessons I see:

Have a plan but try it out first. In Betty’s case, I wish she had rented before buying a house in her new location. There are several websites to compare cost of living among cities. Sperling has a useful cost of living calculator on their website. Niche has numerous lists of best places to live. And of course, the local real estate association in a location you’re considering will have free resources.

Be flexible and resilient. Sometimes plans don’t work as we hope. What’s that old saying, “Man plans, and God laughs?”  Mindset is key when you embark on a new adventure. The website MindTools has articles and resources. Try searching for the word “resilience” in the search bar.

The non-financial aspects of retirement are as important as the dollars and cents (and more so). Betty’s financial analysis was fine, but the things she couldn’t quantify were what made her change her mind. My favorite book on retirement planning is What Color Is Your Parachute for Retirement? by Bolles and Nelson.

We make mistakes. We need to learn from our mistakes and not beat ourselves up about our errors. One life lesson I’ve learned is it’s easy to get down on myself for my past mistakes. I’ve made many errors in my life and I tend to remember them more than the successes. It’s a challenge to stay positive and not lose confidence in your decision-making process. Check out the website IDONTMIND for articles and ideas about dealing with our mistakes. The tagline on this website says it all:

We’re all human. We all make mistakes. It’s okay to forgive yourself and move on.

The future is un-certain. Seems basic, but true. We can make the best plans in the world, but randomness and luck play a role in our lives. There is a worthwhile investment book with a terrific title that captures this lesson. It’s called, Fooled by Randomness: The Hidden Role of chance in Life and in the Marketsby Nassim Taleb.

Don’t follow a wrong decision with another one and compound the problem. If you make a mistake, fix it if you can and move on if you can’t.

What lessons can you take away from Betty’s situation? What have you learned from the mistakes you’ve made in your life, financial or otherwise?

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