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The Top Five Retirement Secrets That You Aren’t Supposed to Know About

November 23, 2021

Retirement years should bring happiness and relaxation to your life. You are free of financial obligations and family responsibilities. Work stress is behind you, and you can look forward to vacations and spending the money you have saved all your life. A survey by Money readers reported that 48% of retirees say they are happier in retirement than they expected. 45% found retirement the same as expected, while only 7% were disappointed.

Happiness in retirement boils down to two main factors: physical and financial wellness. 81% of all retired people surveyed believe that good health is an essential element of retirement happiness. The second most crucial factor mentioned was financial security. We have put together a list of six retirement secrets that everyone should know. Here they are:

1.      Find Four Hobbies

You’ll be surprised to know that there is a correct number of hobbies for retirees to have! It turns out, retirees who keep themselves busy throughout the day by pursuing three or four hobbies tend to be happy. Instead, those who engage in only one or two hobbies after retirement may find a few hours in the day with nothing to do and end up less happy in retirement. Experts advise finding hobbies that help you meet people and socialize.

2.      Rent Late in Life

It is typical for retired people to live in their own homes. Most retirees find solace in owning the place they live in. It gives them a sense of security and stability. However, there are multiple advantages of renting vs. owning. For example, for those who live alone, an owned house can be isolating. Owning a home also brings with it the responsibility to maintain the property to retain its value. It could be a good decision to live in a rented accommodation later in your life. It will help avoid the hassles of home maintenance and to find an environment with more social interaction.

3.      Mandatory Withdrawals

Most retirees are not aware that the IRS imposes a required minimum distribution or RMD on their savings with an IRA. You must begin withdrawing money from the traditional IRA by 1st April of the year after you turn seventy-two. The rules differ for those who turned seventy and a half in 2019 or before. Failing to do so may result in heavy taxes.

4.      Real Estate is a Valid Holding

If an IRA is part of your long-term financial security strategy, know that your IRA account is not just a place to hold equities, bonds, and other investments. It is also good to own real estate in your IRA account. Any real estate IRA needs to be a commercial property and not residential. Even though an IRA has strict rules regarding real estate holdings, it is an excellent way to create a broader range of investments. Talk to a financial advisor before you add real estate or open a self-directed IRA account.

5.      There Are Limits on Investments

In addition to holding real estate in your IRA, an IRA has various rules that limit retirees from investing in just anything. Retirees must be aware of the kind of investments allowed in an IRA. For example, because an IRA is an investment vehicle it prohibits investing funds in insurance, antiques, and collectibles, among other things.

6.      Keep Your Family at a Comfortable Distance from Your Personal Life

When you suddenly have a lot more time in your hands, your relationships significantly impact your mental health. Those who are happily married when they retire usually enjoy their retirement years more than unmarried people. Your children may also not be the source of satisfaction you dreamt of. Many retirees miscalculate their relationships with their children and rely on them for purposes in their retirement years. Such reliance can only lead to disappointment. Protect your personal space and create a busy schedule where you are not dependent on anyone to find a purpose in your life.

Retirement can be a time for fun that you never had in your adult life. It can be a joyful experience for you and all those around you. The key is to plan your finances and your time wisely, take good care of your health and find ways to socialize often. Discuss your finances with an expert to design a happy retirement today! Keep the six secrets in mind and you are sure to find the right ingredients to create your comfortable retirement.

For tips and information regarding retirement plans, contact us.

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About The Author

Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He regularly writes for blogs at MoneyForLunch, Biggerpocket, SocialMediaToday, NuWireInvestor & his own blog for Self Directed Retirement Plans. If you need help and guidance with traditional or alternative investments, email him at rick@sdretirementplans.comor visit Self Directed Retirement Plans.

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