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Retirement is supposed to be the reward after decades of hard work. Morning alarms, office politics and exhausting commutes are all gone. The idea of finally having full control of your time is appealing, and for many, it feels like the finish line after a long race.
But while you may gain freedom, you’ll also lose more than you think. Some losses, like a steady paycheck, are obvious. Others, like a sense of purpose, sneak up on you.
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Without a plan — or a big enough nest egg — they can leave you feeling unprepared for what comes next.
Here are five things that tend to disappear in retirement — and what you can do now to make sure they don’t take you by surprise.
1. The financial safety of your paycheck
The most immediate and undeniable change in retirement is the disappearance of a steady paycheck.
For decades, your income arrived like clockwork. In its place are managed withdrawals from retirement accounts, Social Security and any other income sources you’ve set up along the way.
Over 80% of older adults face financial struggles or risk economic insecurity in retirement, according to the National Council on Aging. Inflation worsens this by eroding fixed incomes.
A solid withdrawal strategy, like the safe withdrawal rate (now 3.7%), helps balance spending and preservation. Diversifying income with annuities, rental income, or part-time work, moreover, can reduce financial stress and help to delay Social Security until age 70, maximizing benefits.
A Home Equity Line of Credit (HELOC) can also offer an extra source of liquidity and financial flexibility at this time. With home values higher than ever, you can make your home work harder for you by leveraging its equity.
The average homeowner sits on roughly $315,000 in equity as of the third quarter of 2024, according to CoreLogic. Year over year, homeowner equity is also up by 8%, for a national aggregate of $17.6 trillion.
With a HELOC loan, you can turn all that equity into tax-free cash, which can be used to pay off high-interest loans. Rates on a home equity loan are typically lower than APRs on credit cards and personal loans, making it an appealing option for homeowners with substantial equity.
Unlock the lowest possible rates in minutes by shopping around with LendingTree. You can compare real loan rates offered by different lenders using their side-by-side comparison tool.
2. Your risk tolerance
When you’re working, taking risks with your investments doesn’t feel as scary. If the stock market dips, you know you’ll keep contributing to your 401(k) or IRA, and there’s time to recover.
But retirement changes the stakes. Market downturns impact your portfolio and how much you can safely withdraw each year.
Market volatility can feel scary, especially when it threatens your retirement income. You’ll need the guidance of a professional financial advisor to navigate through it and help you stay calm.
Advisor.com simplifies the search process by connecting individuals with an exclusive network of fiduciary advisors, each dedicated to transparency and held to high ethical standards.
All you have to do is answer a few simple questions regarding your finances and long-term goals, and Advisor.com will connect you with a vetted expert near you who is best suited for your needs.
You can then set up a free, no-obligation consultation to see if they’re the right fit for you.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
3. Your frivolous spending habits
Many retirees ramp up travel, dining out and hobbies, leading to what financial planners call the “retirement honeymoon” phase.
While this initial surge in spending may feel like well-earned freedom, tracking expenses and adjusting for different phases of retirement can help ensure financial stability throughout the decades.
Even in retirement, you still want your money to keep growing. Make the most of these extra working years by automatically investing your spare change with Acorns.
The app automatically rounds up your everyday purchases to the nearest dollar and invests the difference into a diversified portfolio of ETFs. This means that while you’re still earning an income, every transaction — from your morning coffee to grocery shopping — contributes to building your retirement nest egg.
What’s more, you can receive a $20 bonus investment when you sign up.
It’s also important to have a sizable emergency fund in retirement to meet any unexpected expenses. By parking your emergency fund in a high-yield savings account, you can ensure that it keeps earning interest when not in use.
With a Wealthfront Cash account, you could earn up to 4.25% APY on your uninvested cash for your first three months (0.50% APY boost on top of the 3.75% base variable APY) provided by program banks. That’s over ten times the national deposit savings rate, according to the FDIC’s September report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, Wealthfront Cash account balances of up to $16 million are insured by the FDIC through program banks.
4. Your employer-sponsored benefits
Losing a paycheck is tough, but losing employer-sponsored benefits, especially health insurance, can be an even bigger shock. If you retire before 65, you’ll be without coverage until Medicare starts, and even then, gaps in coverage can lead to unexpected expenses.
Having a reliable, affordable insurance policy in place helps protect your retirement nest egg from being depleted by extended medical care expenses, such as in-home care, assisted living facilities, or nursing home care, providing an extra layer of financial security when you need it most.
Long-term care insurance offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities.
Without proper planning, paying for long-term care could deplete your retirement fund. In many cases, the burden of paying for care often falls on family members – potentially straining their finances.
When considering long-term care insurance, GoldenCare offers different options based on your needs, including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living, and traditional long-term care insurance.
5. Your perceived sense of purpose
Work isn’t just about earning money — it provides routine, social interaction, and a sense of accomplishment. A study from the National Library of Medicine has linked a lack of purpose in retirement to increased health risks, including depression, cognitive decline, and even verbal memory function.
The best way to avoid this emotional downturn is to plan beyond just your finances. Volunteering, pursuing passion projects or even taking on part-time work can help fill the void.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.