The 'Busy Trap': 5 Ways a Hectic Schedule Can Ruin Your Retirement
You're supposed to slow down in retirement, but many do the exact opposite. Here is why treating retirement like a full-time job is a big mistake, and what you can do instead.
'Who has the time?' isn't something retirees often say. Or do they?
Many people in retirement are busier than ever, saying yes to everything from volunteering and consulting to babysitting their grandchildren, all while juggling multiple responsibilities as they search for purpose. Others overcommit out of fear of downtime. They were so busy during their working years that the thought of free time scares them.
"I definitely know retirees who were easier to get a hold of when they were working," says John J. O'Hare, wealth manager at O'Hare Wealth Management at Steward Partners. "They are now on six different boards, traveling, volunteering, fundraising. People want to find their purpose; after that, very few know what it is, so they sign up for a million things."
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Having purpose in retirement is important to stave off loneliness, depression and cognitive decline. Studies have shown it can help you live longer, lower the risk of disease and keep your mind sharp.
But how much is too much purpose? Sometimes, overcommitting can cause more harm than good. Here are five sneaky ways saying yes to everything when you retire can hurt you.
1. It can derail your retirement plans
You retired for a reason, but if you overcommit and it derails your plans, why did you leave your job in the first place?
O'Hare had one client who retired to Florida but couldn't claim residency because he was consulting too much. Another was offered a year's salary to work for three months, and that offer was extended once the year was up. Eventually, the client had to turn it down, because he wanted to enjoy his retirement, says O'Hare.
If you find you can't pursue a hobby, spend time with family, or even sleep late because you are overextended, that's a sign you may want to pull it back a bit.
2. It can cause physical or emotional stress
Even if you like jumping from one commitment to the next, your body and mind may not. Physically, it can wear down your aging body. Mentally, it could lead to burnout. If you're too busy to keep up with your regular checkups, you could end up with health issues in the long run.
3. It can lead to financial strain
Finding purpose can be expensive, especially if you're not sure what it is. If you're spending more than you have in the pursuit of purpose, it could lead to financial hardship. If you're forced to withdraw money from your savings in a down market, it could trigger sequence of returns risk, in which you lock in losses early in retirement before your money has time to recover, creating a potential shortfall later on.
"Overcommitting can show up in dollars, and it can show up in time," says JR Williams, a senior director at Ally Invest. "If you're saying yes to one trip, it doesn't really impact your finances, but if it becomes a pattern and you are traveling more than you had initially anticipated, it can blow up your budget."
4. It can leave you little free time
Retirement is supposed to be your time to relax, not to have a schedule for every minute of every day. Sure, you want a routine, but you also want time to be spontaneous. Plus, Williams says you run the risk of becoming the person that everyone assumes is always available if you always are.
Occasionally helping neighbors or enjoying spending time with your grandkids is one thing; becoming a full-time babysitter or a permanent errand-runner is another.
5. It can strain relationships with family and friends
If you're spending all your time consulting or on the golf course and not enough time with family or loved ones, it may strain those relationships at a time when you should be cherishing them. Time is a commodity, especially in retirement. Experiences matter more than how much money you can make from that consulting gig or how many times you can sink that hole-in-one.
Give yourself time
It's important to keep busy in retirement, but that doesn't mean you have to say yes to everything. Finding purpose doesn't have to happen overnight. It can be a slow and steady process.
In fact, O'Hare tells his clients to wait at least six months to a year before making any major commitments. "You want to get bored playing golf, fishing, doing all those things first and then find out if you really are bored," says O'Hare.
After that, if you want to do everything under the sun, go for it!
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