4 Retirement Traps No One Tells You About

Most people spend decades preparing financially for retirement, but very few consider the emotional and mental changes that come with it. Retirement isn’t only about money in the bank. It’s also about identity, purpose, relationships, and planning for the future. Retirement often feels more uncertain and overwhelming than it needs to. The transition out of work is a whole new stage of life with hidden retirement traps that can catch you off guard.

Life will look and feel different when the structure of work is no longer there. Let’s take a look at four challenges that often surprise people after they retire and how to navigate them.

1. A Shift in Identity

Retirement often brings a shift in personal identity. After spending decades working in a specific industry or role, many people define themselves by their career. When that ends, it can feel disorienting.

It’s important to prepare yourself for that change. Think about how you’ll answer the question, “What do you do?” If you don’t always want to talk about who you used to be, prepare a response that shifts the conversation. Just saying “I’m retired” isn’t really who you are. You might be a professional grandfather, an amateur golfer, a wood craftsman, or someone who left corporate America to explore photography.

Tip: Write down 2–3 ways you’d like to describe yourself in retirement that don’t reference your old career. It makes conversations easier and helps you mentally step into your new chapter.

Purpose also plays a huge role in how fulfilling retirement feels. If you don’t have a reason to get up in the morning, the days can feel empty. Many retirees underestimate just how much of their structure and identity came from work. Without a plan, it’s easy to feel adrift.

2. Not Having a Hobby

Another thing to prepare for is how you’ll spend your time. What will you spend your days doing? Many people in their 70s and 80s say they regret not having a hobby in retirement. Without something meaningful to do, days can slip away into sitting around or watching TV.

The hobby itself doesn’t matter. What matters is having something that gives you energy and purpose. Here’s a look at some of the most popular hobbies for retirement to give you a little inspiration.

Painting
Pottery
Learning a language
Gardening
Woodworking
Brewing
Cooking
Traveling
Volunteering
Photography
Golfing
Hiking

Try something new, and if it doesn’t feel right, switch it up. The beauty of retirement is that you finally have the time to explore. How many hobbies should you have in retirement? There’s no magic number, but research suggests happy retirees often have three to four.

3. Longevity Risk and Spending in Retirement

Another surprise for many retirees is how long retirement can actually last. What if you live 30 more years after you retire? A lot of people assume they’ll live until 80 or maybe 85, but according to the Social Security Administration, one in four 65-year-olds today will live past 90. Additional stats from the Society of Actuaries Longevity Illustrator estimate the following.

65-Year-Old Non-Smoking Couple in Average Health:

50% chance of one spouse living to age 90
25% chance of one spouse living to age 94
10% chance of one spouse living to age 98 or beyond

Think of it like climbing Mount Everest. Everyone trains and focuses on getting to the summit, but the descent is just as important and dangerous. In retirement, overspending is like racing down too fast, while underspending is like going too slow. The goal is to pace yourself so you enjoy the journey and still make it safely to the end. Underestimating life expectancy can create two problems. Some people spend too freely early on, only to worry later about running out of money. Others become so cautious that they freeze up.

Once the last paycheck stops, some people become afraid to use their money. One of the more common retirement traps is not spending enough. Maybe they skip taking that trip to Europe, avoid meals at their favorite restaurants, or hold back on experiences they once looked forward to. Others go the opposite direction, spending too quickly without realizing how long retirement may last.

How Can You Fix Retirement Spending Habits?

This is where proper financial planning can help you avoid one of the most common retirement traps. Balancing your spending in retirement is the best thing you can do. Not going so fast that you run out of money, but not going so slow that you miss out on the experiences you worked so hard for. A clear financial plan makes all the difference because it takes the guesswork out of what you can spend.

4. Giving Too Much Money to Your Kids

Another retirement trap that might sting a little is being too generous when it comes to your kids. Nobody is saying you shouldn’t give anything to your children. Many parents find deep joy in helping the next generation, but generosity has to be sustainable.

If you give too much too early, and without the right structure, you risk more than just running out of money yourself. You may also create a lifestyle for your kids that they can’t maintain on their own. And if your finances take a hit later in retirement, that support could suddenly disappear, putting both you and your children in a tough spot.

Balance giving with your own financial situation. You can still give your kids money. The goal is to do it in a way that works for everyone. Here are a few smart approaches.

Give when it matters most. You don’t have to give the same amount to each child every year. A gift may be more meaningful during a house renovation, a business launch, or a time of need, rather than just landing in a checking account.
Keep track of your gifts. Keep track of the gifts you give each year and share the list with your estate attorney. They can update your estate documents to make sure everything balances out between your children in the long run. This way, you can give when it matters most without worrying about fairness later.
Invite kids into your financial planning. Including them in a review with your advisor gives them a clearer picture of your goals, budget, and what’s realistic. It can also make it easier to explain why giving might need to be scaled back.

Tip: Be flexible with the amounts. Maybe you originally hoped to give $20,000 each year, but after reviewing your retirement income, it makes more sense to give $10,000.

Planning for Flexibility Should Be a Priority

Retirement is often painted as a time for traveling, pickleball, and endless relaxation. You should take the time to relax, but retirement plans aren’t “set it and forget it.” Building flexibility into your retirement strategy helps you adapt without stress. Think of your plan as a framework, not a rigid rulebook. Maybe you planned to travel more in your 70s, but health issues slow you down. Or markets perform better than expected, giving you room to be more generous with family. The key is adjusting rather than feeling stuck.

Review your financial plan at least once a year. A simple check-in helps you see if your spending, savings, or gifting strategies still make sense. Small course corrections today can prevent bigger problems tomorrow.

Don’t Fall Victim to Common Retirement Traps

Retirement is more than a financial milestone. It’s a life transition that affects identity, daily purpose, spending habits, and even family relationships. By planning for these four challenges, you can step into retirement with more confidence. Every retirement story looks different, and your plan should reflect what matters most to you and your family. That’s where the right guidance makes all the difference.

Ready to start building a retirement plan that works for your future? Contact Paces Ferry Wealth Advisors to schedule a call.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.

Zachary Morris, CFP®

Having traveled to over 35 countries, Zach is a believer in Ralph Waldo Emerson’s statement that Life is about the journey, not the destination. Being a CERTIFIED FINANCIAL PLANNER™ provides Zach the opportunity to help clients define and realize their journey, and co-founding Paces Ferry Wealth Advisors, an independent firm, allows the freedom to define the client experience along the way.