couple, retirment, freedom, senior livingAccording to Transamerica Retirement Studies, health and outliving money are equal fears for retired adults.   Add the Social Security threat and lack of money becomes the number one fear among aging adults.

Better lifestyle choices and modern medicine have increased longevity. In fact, according to the Social Security Administration, the life expectancy for a 65 year old man is 84.3.  For a 65 year old women, her life expectancy is 86.6.  The problem is not living longer. The problem is running out of money to live the way you want in retirement.  On this page, you’ll learn about the pros and cons of retirement and how you can plan to protect your assets, keep your standard of living, and live a better life.

Pros of Retirement

Retirement brings many positive changes.  Leisure time is probably the best change in retirement.  The days of waking up to an alarm clock, showering, and commuting to a job are over, at least on a full-time basis, if you decide to keep working.  Retirement allows for flexible scheduling and time to do what you want when you want.  Spending time with family, working on a hobby or your home, or traveling are typical activities in retirement.

Stages of Retirement

Most people want to retire in good health.  But it is also important to afford retirement.  According to the Society for Certified Senior Advisors, retirees go through a three-step financial process.  The first step occurs early in retirement.  Older adults, 55 to 69, expect to maintain their current standard of living.  This honeymoon phase of retirement and the five years before carry the greatest risk to your funds.  This is because most adults spend as when they worked.  They fail to adjust their spending habits.

In the next stage, retirees slow down their spending, typically due to health changes, new routines, and satisfaction with experiences in the earlier stage.  In this stage, seniors, typically 70 to 84, realize changes are necessary to maintain their original retirement fund.  There is less need to try new experiences.

The last stage impacts seniors over 85.  In this stage, declining health is the greatest challenge to retirement funds.  Seniors in this stage drastically slow down activity and spending for many reasons. One reason may be loss of income from the death of a spouse or significant other.  Another reason may be health-related expenses, such as a long term care event.  Knowing the stages and what to expect, can help you develop a better retirement plan.

Cons of Retirement

Despite the pleasant thoughts that come with retirement, there are some reasons not to retire.  By far, the decision not to retire is money.  Depending on your retirement plan, your source of income may determine when and how you will retire.  There are many sources of retirement income.  You may have one or a combination of the following income sources.

Sources of Retirement Income

• Social Security
• Individual Retirement Accounts
• Employer-Sponsored Retirement Plans
• Annuities
• Savings
• Work
• Investments
• Home Equity

Financial Retirement Tips

If the thought of outliving your funds overwhelms you, consider these financial retirement tips.
Start with a plan.  Retirement, like any life event, takes planning.  While you can do it yourself on Excel or other software planning tools, it is best to consult a qualified Financial Advisor for this important event.  Keep in mind that the field of financial planning is not standardized or regulated.   Anyone with minimal training can hang a Financial Planner shingle.  Be selective and consider a licensed Financial Advisor.  Licensed Financial Advisors are held to a higher standard than Planner because they are regulated.  For example, Certified Public Accountants or Insurance Producers are licensed and regulated in Indiana.  The extra cost you might pay for a Financial Advisor will outweigh the loss you could suffer using a Planner or doing it yourself.

Stay with your plan.  Daily, Financial Advisors help clients who strayed get back on track.  Life events happen and are often expensive.  Resist the temptation to borrow against excess assets or use your savings.  Your Financial Advisor can help you plan for emergencies to avoid this temptation.

Start planning early.  Another concern Financial Advisors see is starting a plan late.  While it is important to start planning for retirement anytime, the sooner you start the more your money can work for you.  Money invested well grows through compounding over time.  You will need less money to invest in your retirement fund the earlier you start.  Also, available income options may be limited to you the later you start your plan.

Monitor your plan.  Reaching retirement is exciting for many people.  The initial stage is often described as a honeymoon phase where everything seems perfect.  The problem is that many people in this stage over spend.  Bucket List experiences and material items that were sacrificed for years now become priorities.  Keep in mind, the greatest threat to your financial health is five years before and five after retirement.  These are the adjustment years as you change spending habits through your transition.  Your Financial Advisor will help you establish a monitoring system for your retirement plan.  Some Financial Advisors will monitor the plan for you and alert you to threats.


Retirement carries mixed emotions.  On one hand, it is a time to celebrate and reward yourself for years of hard work and sacrifice.  On the other hand, retirement has threats like health and finances. Staying healthy is a given.  Prevention is always cheaper than treatment.  The new challenge in retirement is outliving your money.  While no one can predict how long you’ll live, a good financial plan started early and monitored frequently can give you peace of mind to enjoy the retirement of your dreams.

For more tips on real estate, aging-in-place, and not outliving your money, request a copy of our free book, The Northwest Indiana Guide for Seniors.