A Healthy, Wealthy and Wise Retirement
Posted on October 4, 2017
Everywhere we look, we’re surrounded by commercials about how to retire well. Before you retire, keep in mind a few important observations, and even afterward, there is always an opportunity to fine tune your plan.
Envision retirement and how you will spend it – You may decide not to retire quite as soon as you thought. People are living significantly longer, so don’t be tied to a certain retirement age, simply because you think it is expected of you. Many people actually miss the work they did during their careers. Work provides structure, social connections and a sense of purpose. The sudden shift in life can leave both men and women lacking a sense of self-worth.
The good news is that retirement from a long-term career can be a transition to another career, a new level of volunteerism, mentorship or a new business venture. Also, a retiree has years of experience in a particular industry, corporate or small business management, philanthropic leadership, as well as business and community connections. Retirees are a bank of knowledge, advice and opportunity. Share the wealth!
Lean into your financial future
Eliminate debt – Eliminating any unnecessary debt before leaving the workforce is one of the most vital keys to financial success during retirement. A 2013 study by the University of Michigan showed that nearly one-quarter of Baby Boomers ready to retire still had more debts than assets. Retirees who create a debt-elimination plan early on and stick to it, can avoid a long-term financial squeeze.
Self-discipline – A recent poll noted that a healthy amount of financial self-discipline before retiring had a bigger impact afterward than most people expected. If you want a comfortable retirement, make adjustments during the working years by establishing a lifestyle that is acceptable to you, so that once you’ve taken the leap, you are comfortable in this new phase of life.
Fiscal reality – The rule of thumb is that individuals plan to spend 20% less in retirement than when they worked. In reality, most find they spend as much or more, at least in the early years. This is due to having more free time to spend money on an extra vacation, new hobbies, socializing and entertainment. If this describes you, build it into your financial transition plan.
Remember to plan for inflation, too. What cost you $50,000 annually at the time of retirement, may cost you $70,000 10 years later. Note that sizable and/or sudden changes in income can result in Medicare surcharges, such as premiums; individuals pay for Medicare Part B and prescription drug coverage. And budget for eventual out-of-pocket medical costs, which for many families can well exceed $100,000 over time.
A Healthy Bucket List – Don’t wait to retire to enjoy those special things you want to do in life. Health is one of the most unpredictable factors that affects a quality retirement. Work wish-list items into your lifestyle now and embark on those more strenuous and expensive travel adventures while you are working and can physically tackle them.
We help many families prepare for and manage their retirement lifestyles. Bring your trusted advisors into the planning process, so your retirement years will be all that you envisioned.