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Don't Squander Your Retirement

Tom Sightings

Maybe you believe you'll never retire, either because you love your job, or you think you'll never be able to afford retirement and will have to work until the day you die.

But here's the reality. There are three certainties in life: Death, taxes and retirement.

Eventually you will retire, whether you want to or not. Maybe you'll be laid off in your late 50s and never find another job. Maybe you think you'll continue working, but will find out your eyesight is failing, or you can't make it through the day without collapsing with fatigue and sore muscles.

My father never wanted to retire. He worked until he was 72. But his company finally did get rid of him. And he lived until age 90--or 18 years of unplanned retirement.

Other people look forward to retirement. But their view of life after work is no more detailed than some gauzy dream about palm trees and a golf course. Retirement can be a time of rebirth and renewal, an opportunity to write your memoir, start a business, knit sweaters for your grandchildren or just kick back and enjoy your well-earned extended vacation. But there are plenty of ways to squander this opportunity, which will force you to scrape by, rather than enjoy a life of dignified leisure in your senior years.

Here are the four main ways people "blow it" when it comes to retirement:

They don't save. It seems so obvious. But if it's obvious, why, according to the Employee Benefit Research Institute, do over 50 percent of workers admit they have saved less than $25,000? And why do half of retirees also say they have less than $25,000 in savings? One reason is that it's hard to save money. Maybe you've faced a layoff and had to dip into your retirement fund, or your kid got into Stanford and you're sending your financial assets to Palo Alto. Then there's the old standby: procrastination. The only way to save for retirement is to remind yourself that the days of pensions are gone, and the days of thinner Social Security checks are upon us (especially if the government follows through on its plan to lower the inflation rate it uses to figure future increases). So make funding your IRA or 401(k) a top priority, above vacations, new cars and even college tuition.

They don't plan. How many hours do you put into planning a two-week vacation? So how much planning do you think should go into a 20-year retirement? Of course, your plans will change over the years, but that's no reason not to plan at all. If you have ideas of moving to Florida or Arizona, and then grandchildren come along, or a health issue crops up, at least you know where you stand. Maybe you will make an accommodation, like moving to Orlando instead of St. Petersburg, to give your grandchildren an extra incentive to visit. As the old saying goes: It is wiser to make your own decisions than to let time make decisions for you.

They don't discuss. He has dreams of retiring early. She just got her masters degree and is starting a new career. Or, she has visions of lying on a beach, while he wants to hike the Pacific Crest Trail. Start talking about retirement in your 40s, so you can start planning in your 50s, and put your plans into motion in your 60s. It takes time to bring your dreams into focus, discuss them with your spouse, make reasonable compromises, do the necessary research and then adjust your plans over time. When my folks suddenly faced retirement, my dad said he wanted to move to Cape Cod. My mother's heart was set on Florida. As you might guess, that caused a bit of friction in the family.

Hope for the best. You hope you'll have enough money, hope you'll enjoy good health and hope your kids will want to visit. But hope alone rarely brings us the results we want. If you haven't planned, or don't have a long-held dream, one idea is to take a "gap year" like kids do before or after college, to find yourself and decide what you want to do with the rest of your life. That's what my own parents did, and luckily, after spending a year traveling, discussing and consulting with family and friends, they reached a reasonable solution: They did what my mother wanted. But it worked out for my dad as well, when they found a place in Florida that offered most of the things he was looking for in Cape Cod.

Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement, and other concerns of baby boomers who realize that somehow they have grown up.

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