What Happens When You Don’t Plan for Retirement?

What Happens When You Don't Plan for Retirement?

Having a financial plan is essential for a comfortable lifestyle, whether you are approaching retirement or are already retired. But what if you haven’t prepared yet for retirement?

Should you find yourself procrastinating and not developing a long-term Retirement Plan (“PLAN.xls”), take heed. This can get you into serious trouble over the long run, with your post-work lifestyle possibly taking a hit in one of two ways: by either overspending or underspending.

There is a weird psychology that can cause a retiree to drag their feet on developing a personal financial strategy. They might worry that, if they know too much about how their finances will play out over time, it will either scare them or at least disappoint them as financial reality sets in.

Think of it as a distorted version of the old saying, “What you don’t know can’t hurt you.” So, retirees spend away, figuring that they will worry about it later.

However, in the case of retirement, what you don’t know CAN hurt you. Especially when time isn’t on your side, and big financial mistakes are much harder to recover from since you aren’t working (or as least as much as you were earlier in your career) and the lifespan clock is ticking.

Whether dealing with overspending or underspending, the irony is that you will carry a heavy burden of worry in either case. But what you are really searching for in retirement is, above all, peace of mind.


On the overspending side, the greatest risk is quite obvious. You can run out of your retirement funds too soon.

This can put you in a very compromised situation, which might lead to a number of scenarios. It could possibly force you into prematurely selling assets; lead to significantly downsizing your lifestyle; or, your worst nightmare, having to ask your kids for help!

Then, in the aftermath of whatever happens, you have to deal with all the headaches and stress that come from the tense situation of when your financial resources are strained.

These are outcomes that no one should have to deal with in retirement.


In some ways, underspending might not seem all that serious. After all, it may mean you are basically saving more money for an emergency, or for passing on an end-of-life surplus to inheritors.

While true, you are also short-changing your partner and yourself in these precious and finite retirement years.

Now is the time to do the things you have always wanted to do:

  • Traveling to destinations or on far-flung getaways that you have long-dreamed about;
  • Finally remodeling that kitchen that you have waited for so long;
  • Treating your grandkids or other loved ones to some marvelous trips and new opportunities
  • Any other lifelong goals or dreams that you might have been putting off until later

Of course, these goals can go beyond just what you plan for yourself. By underspending, you might be limiting opportunities or shared experiences you would otherwise have with your community or your social networks.

You may have some good friends who might ask you if you would like to take a river cruise with them to Europe. But you have to say “no” because you really don’t know if you can afford it.

Or your church elders might approach you to make a contribution to an important fundraising campaign. Your generosity would help financially support a much-needed addition… But you have to respectfully decline because you really don’t know if you have the funds to help.

Life unexpectedly presents opportunities like this. You want to be able to say “yes” if you are confident that these expenditures will properly fit into your PLAN.

Stress and Anxiety

Stress and anxiety are the last thing you need in retirement. Far too often, they lead to poor health. And poor health can lead to increased medical costs, which puts even more pressure on your retirement financial resources.

It can become a vicious cycle, caused by the fact that you don’t have a plan that gives you confidence.

From there, it’s hard to muster the resilience in the face of pop-up adverse circumstances. Let’s also not forget the peace of mind that comes from knowing what you can’t spend, but is balanced by living happily within the boundaries of what you can.

Balance is the Answer

So, what happens when you don’t plan for retirement? The real hazards of overspending or underspending your money. Unnecessary stress and anxiety. A less-than-what-you-worked-hard-for lifestyle.

The better alternative is to plan ahead of time — and it will be more than pay off over the long haul.

A proven-to-be-effective strategy for developed a Balanced PLAN is by using a 30-year planning spreadsheet (or for even longer, if longevity runs in your family) that can model and forecast your income, expenses, and change in assets. And it’s wise to do this in collaboration with a trusted financial professional.

Are you ready for personal guidance from a financial professional in developing a long-term financial roadmap? Or perhaps you could benefit from exploring ways to see how you can further improve your existing strategy.

Financial professionals stand ready to help you at SafeMoney.com. Use our “Find a Financial Professional” section to connect with someone directly. Should you need a personal referral, call us at 877.476.9723.

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