My well planned retirement lifestyle got a lot wrong. Nothing catastrophic but wrong nevertheless. Successfully getting to early retirement takes a lot of planning. It certainly requires a solid financial plan. But it also needs forward thinking plans about not only financial aspects but the non-financial aspects of retirement. I got a lot of things right and my early retirement is everything I hoped for.

We can make estimates about future inflation and portfolio returns. We can also dream about our future retirement lifestyle and contemplate the bliss of financial independence.

I was just looking at my old planning notes. Looking back at the past 6+ years of my early retirement I see where my pre-retirement dreams and estimates split with my early retirement reality.

Sometimes you just have to live it to fully understand it.

Here are some things I got wrong that anyone should think about and beyond with their planned retirement lifestyle.

My Planned Retirement Lifestyle Oops

The Financial Side of Things

Inflation isn’t evenly spread across the board –

We all do it. We plug into the retirement calculator  our future inflation estimates based on at least a 3% increase per year or use the PPI or CPI inflation option to understand our retirement funding. But it isn’t that simple. Some things defy that logic by having a far higher inflation rate. If those things are already a high percentage of your budget then all bets are off.

My planned retirement lifestyle oops was about health insurance and how it affected my real inflation rate. I knew health care would be above the standard 3%, PPI or CPI inflation estimates. But I figured other things would be below and it would even out overall. Not so. My health insurance cost is now 80% higher than it was 6 years ago. Not only that but changes in my retirement health benefit plan has done away with copays and I now have higher out-of-pocket costs for any medical issue. What was a yearly $6,700 retirement budget item 6 years ago is now $14,200. It alone represents 36% of my yearly budget which is far more than I estimated.

Inflation Calculation Tip: Take things you believe that could have a higher inflation rate aside from the rest of your budget. Look at everything from insurance to your travel. Calculate what percent it represents of your budget and figure out how much it will increase your overall retirement lifestyle costs. Then raise your overall inflation percentage used in your calculations to account for it. Using the standard 3% or 4% inflation rate may not be enough if you have high-flying budget items.

Retiring with a Mortgage –

Many retirees do retire with a mortgage and I was one of them. I had a low-interest 30 year mortgage and a retirement budget to pay for it. I decided to stay invested instead of paying it off. After all, the numbers worked out in my retirement calculations.

My planned retirement lifestyle oops is about how I underestimated the freedom of being mortgage free. It also allows for more budget options. I only looked at the monthly payment and low-interest rate to decide to keep it. I later began an encore career and used the income from it to pay off my mortgage. Now I see things differently. There were 2 financial factors missing from my first “retire with the mortgage” decision.

• I didn’t have enough tax deductions and was no longer able to use the mortgage interest tax deduction.
• My budget was higher to cover the mortgage payment, meaning the possibility of having higher taxable income.

I also didn’t consider the peace of mind factor. Aside from that, it didn’t take long for me to be grateful that the mortgage was paid off once my health insurance and medical costs rose so dramatically. Having no mortgage makes it far easier to absorb such increases in retirement lifestyle costs.

Retiring With or Without Mortgage Decision Tip – When mortgage interest rates are so low it is easy to only consider that in the decision. For many the decision is to stay invested because the investment returns can be higher than mortgage interest saved with a payoff. But it is important to also look at your tax situation. Not only for mortgage interest deductions but also the impact of needing to have higher taxable retirement income to support paying it. Look at the interest saved with a mortgage payoff as a guaranteed return on your money. If you are planning on staying put for a long time then a mortgage payoff might be the better choice.

Can no longer do what I used to do –

I don’t think I am alone with this. In my mind I am still 35 years old and can do anything. The reality is there are things I used to do that I shouldn’t be doing or can’t do anymore. I have now slammed against many physical limitations associated with past sports injuries and overall age related issues. A couple of things have come up since retiring that has opened my eyes. I need to account for this going forward. I am now only 58 and my limitations will only increase over time.

My planned retirement lifestyle oops is I didn’t increase my miscellaneous retirement budget category enough to cover for this. I am surprised at how much it costs to hire someone to do some of the things I do now and things I used to do. Stuff I did back when I could just do things without thinking twice about doing it.

Reduced Abilities Tip – Look at the physical things you do now. Then calculate what it will cost to hire them out when you can no longer do them. For me it is associated with auto repair, home repair, tree removal, etc. Some things like repainting your home exterior will only come up every 5 years or so. I used to do it myself, spending many days on a ladder. Not anymore. Calculate what will be needed in the budget to cover a growing list of new future miscellaneous retirement budget items.

The Non-Financial Side of Things

Less Free Time Than Expected –

You hear it all the time from retirees. “I don’t know how I had time to work before.” I used to think they were nut-jobs. Not anymore. I am really surprised at how little free time I have. In retirement I am way busier than I thought I would be. I attribute it to this: Time flies when you are living life on your terms.

My planned retirement lifestyle oops was around my project plans. I way over committed what I thought I would accomplish. That led to some disappointment when I saw my project list go nowhere. Or at least it is slow-moving.

Less Than Planned Free Time Tip- Lighten up! Enjoy yourself. Don’t make a hard schedule of projects. Prioritize and do what you can. Retirement is to be enjoyed, although I do enjoy completing a long-planned project. I now see that what needs to get done gets done when it’s supposed to get done. Also, don’t do what I used to do. Don’t tell everyone about all your project plans. That way you don’t have to explain why something isn’t finished or even started.

Ageing Parents –

We planned to increase our traveling once we retired early and we set a yearly vacation budget. At first everything went as planned. However the past couple of years have had much more family oriented travel instead of leisure or adventure based vacations.

My planned retirement lifestyle oops is about our aging parents. I did not look ahead at future issues associated with our parents needing more help or they’re becoming immobile as they grow older. When we dream and plan about the future, most people focus on all the great things ahead. We now travel and spend much more time staying with and helping our mothers. We always had plans to frequently visit and do things with family. But it has changed in the last couple of years. It started as planned. Running around together doing fun things but is now spending weeks away from home sitting and visiting with our parents. That wasn’t high in our retirement vision. It is now the reality.

Family Considerations Tip- When making retirement lifestyle dreams think about not only your own aging issues but also of your loved ones. Make the necessary adjustments to your retirement travel plans to allow for the stages of life. Have both active and quiet family visiting/helping time in your ongoing retirement lifestyle vision. Our families are the most important thing and dynamics change. Life is finite so take advantage of the time we do have together by including family time in your planned retirement lifestyle.

Changing Passions and Interests –

Everyone should retire to something not just from something. Before I retired I had a bucket list and some hobbies that I was very passionate about. They were fun and part of my planned retirement lifestyle. I still enjoy and pursue them today.

My planned retirement lifestyle oops is about underestimating how quickly some passions and interests can change once retired. I had a lot of time to pursue them and did so happily. But like anything else when done over time, my feelings have changed about some of them. From bucket list encore careers to my automotive hobby, my interests have changed.

Retirement Hobbies, Interests, and Passions Tip- Understand that some of the things that you planned on retiring to may someday not be as enjoyed. Retirement should be over a long period of time. Pace yourself in the things you enjoy doing and always be curious and open to trying new ideas and activities. Playing golf every day over months and years may end up becoming less enjoyable over time.

For me, my encore career passions and interests have run their course and are now behind me. I was somewhat surprised at how quickly I was ready to retire again. That is just fine with me as there are other passions to pursue. Some of my hobbies are still high on my list. But I have purposely throttled back a little with them to allow more time to explore and grow other activities and hobbies as part of my updated planned retirement lifestyle

In Closing

My well planned retirement lifestyle got some things wrong. The things I have listed gives an idea of how there will be some misses in planning for life after retirement. They don’t have to be retirement downers. Just understand that retirement means staying flexible and agile with what you do and how you do it.