Retirement is the one thing that most people look forward to after years of the work-a-day world. Yet, few give much thought on how to avoid the most common mistakes of the newly retired.

One serious mistake that many people make is underestimating the cost of living. Failure to work out a good budget can cause this problem so even though it is somewhat tedious and annoying, budgeting is a must. You will want to keep careful track of all your incoming and outgoing monies for at least one month. The longer period of time you track all your expenses the more accurate your budget will be in the long run.

A second mistake that people make is not planning for the unexpected. Allow a certain amount for emergencies. An accident leading to extra health care costs, a blown furnace or a major car repair bill are all things that can happen at any time. And though it is difficult to anticipate, you should allow an extra amount to cover inflationary costs or other unforeseen costs.

Thirdly, it’s a mistake not to think about the possibility of loneliness. Once you are retired and out of the work force, you no longer have the built in social activities that come with work. It can be a challenge for some people to adjust to a new life if all their old friends are still working. You’ll need to make an extra effort to keep up with old colleagues. It may be just human nature, but it is the old phenomenon of "out of sight, out of mind." That can hurt, but don’t take it personally.

It’s a mistake not to think about how retirement will change your relationships with your spouse or girlfriend. Sometimes there is a period of adjustment because a couple just has a hard time with so much "togetherness" and finds each other underfoot. The best way to stop this from happening to you is to make sure that you have your own activities that keep you busy. This is a good time to try all those hobbies you were thinking about during your work life or volunteer for an organization that has special meaning to you.

Finally, unrealistic expectations can make retired life disappointing. If you have a long list of dreams that you believe will all get accomplished in the first six months of retirement, you’ll likely find it unsettling if you don’t. It can take a period of time to adjust to your new life. During this time, you may find yourself restless and unfocused. Don’t become discouraged. Just set realistic goals with hard deadlines and in time – with patience you’ll adjust, be happily retired and well on your way to living the life of your dreams.