Ways We Sabotage Our Retirement

Everyone has an idea of what they want their retirement years to be like. But when we finally pull the trigger and retire, we are traversing a new path for the first time. With no prior experience, we are likely to hit some snags. It’s best to learn about these snags from others and not have to figure them out ourselves.

I have been retired now for more than eight years, and I coach other doctors who recently retired or are about to retire. So, I have seen a lot of different scenarios play out. During the first few years of my retirement, we did a lot of traveling around the globe and met many retired people. During this time, I learned of many mistakes people made and wish to share some of them with you in the hope that you will avoid making them yourself.

(I would love to meet you in person! Join me when I speak at the Physician Freedom Summit 2025, October 6-8, in Los Angeles.)

Many of the mistakes I see are financial, others are regarding health and wellbeing. As you read these examples, think about which ones will likely play a role in your retirement years and to which you might be susceptible.

Not keeping up with physical fitness

If we are honest, most of us do not like to exercise for the sake of exercise. Yet, if we don’t do something to stay fit, we will have a less enjoyable retirement. I have encountered many retirees who have let their physical condition slide. They can no longer climb the stairs to get on a tour bus, carry their luggage across the airport, walk along the waterfront, or keep up with their grandchildren. There is a good reason we see commercials about older people who have fallen and can’t get up.

Find an activity you enjoy that will help you stay fit. When I was working, patients often asked me what exercise they should do. My answer was always, “the one you will do.” It won’t help you if I recommend something you don’t like to do, because inevitably you will end up doing nothing. 

My activities have varied during my retirement years. I did a lot of cycling, which is low impact, and cycled 2700 miles across America with my son last year at age 62. I have dumbbells at home and my favorite weight training routine is P90X. My wife and I walk a lot while we listen to audiobooks and trained to walk 450 miles across Spain on the Camino de Santiago when I was 57. I recently took up pickleball and after taking lessons, I now have three medals from recent tournaments.

Not having a purpose

One of my biggest worries when I retired was that I would get bored, miss medicine, and want to go back to work. One of the best pieces of pre-retirement advice I received was to map out my plan for what I would be doing during retirement. This proved to be an invaluable step that I completed before deciding on my retirement date.

I postponed retirement to figure it out and I’m so glad I did. Financial Success MD blog and coaching, The Doctors Guide series of books, and playing piano bar music around town were born out of this exercise.

I watched my father retire without a purpose. It did not work out well for him. He sat in a chair and watched TV at age 59 and began to deteriorate. I asked him to become the maintenance manager for my rental properties. He said yes. This gave him a part-time job and something productive to do. He perked back up.

Playing golf every day, watching movies, and relaxing will not cut it, especially for physicians with type A personalities. The lack of using your brain will get old and you will grow bored. You must have some worthwhile purpose during your retirement years.

Setting a retirement age of 65

This is another bad mistake many make. Age 65 was an arbitrary number begun in the age of pensions. Why would anyone retire at an arbitrary age set by someone else? Think about your situation and decide with your spouse what the ideal retirement date might be. But don’t carve it in stone.

My initial retirement date, set when I was a third-year medical student, was at age 50. That target date gave me something to shoot for in planning my retirement savings. I was indeed financially ready to retire when I hit 50. I followed my financial plan and was not surprised when it worked. The problem was, when I reached age 50, I wasn’t ready to retire. My desires in my 20s were not the same in my 50s.

Whatever date you choose, give yourself the leeway to alter it as you approach it. You may love your job so much that you never want to retire. In that case you may set your retirement date to be when you can no longer safely do your job, or when health problems force the issue. 

The bottom line is to ignore age 65 and write your own plan.

Thinking you need to do your taxes by April 15^th 

I was on a 30+ day cruise when I sat down and talked with a man 20 years my senior. He was on his 6^th around the world cruise, each one lasting six months. I had determined that I could only stay on the ship for one segment of the cruise because I needed to get back home to finalize my taxes before April 15^th. He told me to stop wasting time in my retirement years worrying about April 15^th. 

It turns out, he and many of his friends do their taxes at their leisure. Every year he simply has his accountant file an extension, which changes his date to complete his taxes to October 15^th. That allows him to plan the year traveling the way he wants and whenever he happens to be home, he does his taxes.

This plan lets him travel without the need to get home by a certain date. He no longer cares when his K-1s arrive. He always does his taxes after May 1^st, and before October 15^th. During this six month window his accountant is no longer slammed by all the people trying to meet the April 15^th deadline.

Retirement is a time to relax, cut our stress, and stop worrying so much. Removing the April 15^th deadline helps support that goal.

Ignoring tax efficiency

The money we save for retirement is kept in several different types of accounts (401-K, IRA, savings account, brokerage account, real estate…). Each account has a different set of tax rules. If you learn the rules for each account, you can create a lower tax burden as you spend money during retirement.

One of my favorites is making qualified charitable distributions from my IRA.  I happen to have a large amount of retirement funds in a taxable IRA account. When I turn 70 ½ years old, I can begin making charitable distributions from my IRA tax free. 

Currently, when sharing with charities my wife and I support, I pay taxes on whatever I take out of my retirement account. I then give it to charity and write it off on Schedule A, which has limitations. Meaning I don’t get the full write off. In a few years, I can take an IRA distribution and have it go directly to charity without showing up as earned income for the year. This year, the limit is $108,000, which I suspect will be close to my entire required minimum distribution. So, if I were 70 ½ or older I could give my entire required minimum distribution to charity if I want, without my tax man getting a penny of it.

Avoiding investing in the stock market

One train of thought is that when we retire, we should de-risk our portfolio and take it out of the stock market. I think this is a bad idea. One of the reasons we invest in the stock market is because the long-term returns are better than many other choices. When we are looking at long-term investing, the risk of the market is considerably less. 

We often think our investing game is over when we retire, we reached our goal, but this is not true. I retired at age 54 with an average life expectancy of about 80. That means I still had 26 years of investing left on average. My wife will have an additional 4 years on average. We are both in good health and many of our family members have lived well into their 90’s. One person made it to 101, so we might have better than average longevity’s.

With a 30-year investment horizon, there is no need to avoid investing in the stock market. I have been a conservative investor all my life. So, the only change I made when I retired was to move a few years’ worth of distributions into CDs so I would not be forced to sell any mutual funds in a down market when a distribution was required.

Do not keep checking the status of your investments every day. I look at mine once a quarter when I do my net worth update. But I don’t do anything different whether the market is up or down. 

Do not try to time the market, which is the only reason to watch your accounts closely. The only thing you will end up doing is locking in losses. The most likely thing that happens when people watch the market is to pull out right after it drops to avoid losing any more money. Then your money is not in the market when the recovery happens, effectively locking in losses every time the market drops.

Using debt to enhance your lifestyle

Once you are retired, it should be very rare that you ever need to borrow any money. Since you are sitting on a big pile of money, you have the money to buy a car with cash. Quit playing interest rate arbitrage games pretending you are doing something other than using debt to boost your lifestyle beyond what you can afford. 

During retirement, debt payments reduce the amount of money you have for the rest of your retirement budget. You can afford a lot more fun if you don’t need to make those payments. It’s time to stop managing debt and start eliminating it.

Failing to keep a budget

Having a budget during retirement helps keep you within the guardrails of your income so you lessen the risk of running out of money. 

Don’t let lifestyle creep put you in a position of depleting your retirement fund too rapidly. I was spending conservatively the first few years of retirement. After I confirmed that my retirement assets were growing while I was spending on my lifestyle, I loosened the purse strings. It takes a few years to convince yourself there is plenty of money. After which you can adjust your budget accordingly. Spend modestly until you know the retirement budget is good.

Relocating when you retire

This is a big mistake made by many retirees. They have always dreamed of moving to Florida in their retirement but doing so three weeks after leaving their job is a big mistake. 

Moving is a major life stressor and so is retiring. It is best for your mental health to only deal with one major life stress at a time. Don’t relocate for at least a year.

During that first year after retirement test the water where you want to move by vacationing there. Since moving is expensive, it is best to be sure you have chosen a location where you will want to stay. Don’t just vacation there once to see what it is like, spend time in your desired location in all four seasons. Be slow to give up your friends, doctors, dentist, and local activities that you currently enjoy. Losing those connections is part of why moving is a big stressor. 

Retirement is about more happiness and peace. Make changes slowly and one at a time.

There are so many more things on my list that I would love to cover, but this article is already too long. For more information pick up a copy of The Doctors Guide to Smart Career Alternatives and Retirement and The Doctors Guide to Eliminating Debt. 

I wish you great happiness during your retirement years.