After working for decades to save for retirement, one of the last things you want to do is make mistakes that put you on the wrong path right out of the gate. Here are three costly mistakes to avoid in your first year of retirement, according to Motley Fool.
1. Not following a budget Just like you need to follow a budget while you’re working, you should also plan on having one during retirement—especially if you will be living off your savings and Social Security alone.
The secret here is to get a handle on your spending early on so that when you see certain expenses are more than you anticipated, you can compensate by cutting back in other areas.
2. Withdrawing too aggressively from your nest egg Your savings may need to last you 30 years on average, according to Motley Fool. If you withdraw too much money from your nest egg early on, you'll risk running out of money later in retirement. You won’t only lose those extra dollars; you’ll also lose any potential investment income from them. Over the course of 30 years, that could really make a big difference. Therefore, you'll need to develop a withdrawal strategy that gives you access to the income you need without going overboard.
3. Letting yourself get bored According to the Institute of Economic Affairs, the chances of being diagnosed with depression during retirement increases by 40%. With so much free time on your hands, feelings of worthlessness and restlessness can trigger depression, according to the IEA. You may be less likely to develop theses symptoms if you map out a schedule that keeps you occupied. Keeping busy by working on home projects, spending time with friends or even working a part-time job could make a big difference.
You deserve to start off your golden years on a positive note. Avoid these mistakes, and you'll likely set the stage for a happy, fulfilling retirement.