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3 Retirement Mistakes That Will Make You Miserable

When you work hard your entire life, you deserve a relaxing, stress-free retirement as your personal reward. But a few seemingly innocent mistakes on your part could have the opposite result, leaving you overwhelmingly unhappy during your senior years. Here are a few blunders that are more significant than you might realize.

1. Relying on Social Security alone for income

Falling back on Social Security is easier than saving money independently for retirement. But if you don't make an effort to sock away some money in a 401(k) or IRA, you're likely to wind up cash-strapped.

Social Security is only designed to replace about 40% of your previous income, assuming you're an average earner. Most seniors, meanwhile, need somewhere around 70% to 80% of their former paychecks to cover their bills and have enough left over to enjoy life, so don't count on those benefits too heavily. Instead, make an effort to supplement them with savings of your own.

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2. Forgetting about taxes

Many seniors are shocked to learn that the income they're privy to in retirement is largely taxable. Not only are withdrawals from a traditional IRA or 401(k) subject to taxes, but so are Social Security benefits -- unless they're your only source of retirement income, in which case taxes may not be an issue.

To avoid getting caught off guard, read up on taxes in retirement, but also, if possible, put at least some of your savings in a Roth IRA or 401(k). Roth plan withdrawals don't get taxed, which buys you more financial flexibility later in life. And if you earn too much to fund a Roth IRA directly, you can always contribute to a traditional IRA and convert it to a Roth afterward.

3. Not knowing what you'll do with your time

Many seniors enter retirement looking forward to their newfound free time, only to find themselves bored and miserable after a couple of months. Unfortunately, the novelty of not being bound to a work schedule can wear off very quickly, and feelings of restlessness can easily give way to mental health issues like depression.

To avoid that fate, map out some ideas of how you'll spend your time prior to actually retiring. But also, make sure those ideas align with the level of income you'll be privy to. Traveling is a great way to keep yourself occupied, but if you can't afford more than one trip a year, you'll need a backup plan. That could involve volunteering, working part-time, or getting involved in community center activities.

Don't set yourself up for failure

The last thing you want to do is wind up unhappy in retirement -- and the best way to avoid that is to do some careful planning well in advance. Many people wait till their 50s or even 60s to start thinking about their golden years, and that's a mistake by itself.

If you begin planning for retirement in your 30s or 40s, you'll have a greater opportunity to save money, narrow down your goals, and educate yourself on the challenges that are generally unique to seniors. And that's a good way to avoid the misery so many retirees unfortunately face.

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