One of the most frequent discussions I have with my clients involves setting up a game plan for a worry-free retirement. The decisions, the options, and the “what-if’s” can be intimidating.
Is it possible to achieve financial peace of mind while pursuing dreams of long-delayed travel, recreation, and other interests? What about unexpected events or changes?
The greatest reward of my work is working with my clients to achieve their goals – the ability to live worry-free in retirement. In this article and through this blog I will try to de-mystify some of the retirement fears and myths and help you gain the knowledge you need to plan for a secure and comfortable retirement.
Defining Your Retirement Life
The starting point of any of my pre-retirement planning conversations is this question: what do you want from your retirement? What do you need, and just as importantly, what do you want to do during your retirement years?
This question usually brings up some common concerns – financial security over an indefinite period; good health (and the costs of maintaining it); the possibility of needing long-term care, and unexpected expenses such as major home repairs. More and more, however, it also opens up other questions about how to achieve long-held dreams and goals of how to use the time spent in their “ideal” retirement life.
Reflection & Rest
With retirement comes freedom -- the freedom to enjoy living at your chosen pace. At least at first, this seems to be the main desire of retirees -- the ability to wake without an alarm clock for the first time in many years, to go where and when -- or even if -- you wish. It may also mean diving into that long-postponed travel and adventures there just wasn’t time for when you were in the working world. After that initial exhilaration, however, there seems to come a time when retirees start asking, “What now?”
Having control of how you spend your time often results in the desire to re-invest in important relationships, whether it be a spouse, children, siblings, or friends that you weren’t able to devote the time you would have liked when you were working. Is there someone you haven’t seen or spent quality time with that you would like to reconnect with?
New Activities & Pursuits
Is there some hobby, skill, or craft you have always wanted to learn but never had the time? A destination you always wanted to travel to but couldn’t? Retirement is a perfect time to devote your efforts into developing those hidden interests and living your dreams. As you define your retirement life, take time to seek new experiences -- travel, exploration, new adventures, hobbies -- whatever peaks your interest. You’ve earned it!
Major Concerns in an Evolving Retirement Landscape
Often these dreams and hopes for retirement come along with major concerns and fears. The longer life expectancy of the average American is an important factor in the changes redefining the retirement landscape. The average lifespan for a person who was 65 years old in 2012 is an additional 19.3 years -- 20.5 years for women and 17.9 years for men. That additional time requires extra thought and preparation.
Financial Security, Retirement Income Streams & Retirement Work
Securing steady income is the key in retirement planning. For peace of mind through a longer life - planning for the impact of inflation on fixed payments, as well as ensuring that you don’t outlive your savings, is crucial. Social security benefits and income from employer-sponsored plans typically provide only a portion of the income required.
Either by choice or by necessity, today more and more of us expect to work during retirement, ideally with a balance of work and leisure time. Retirement is viewed as a time for both renewal and accomplishment, and the way to achieve this often comes with a discussion about a different type of work. Desires for stimulation and satisfaction remain top ranking factors in seeking retirement work.
In the context of a longer life, the increasing concerns about serious health problems that occur as we get older is no surprise. Planning for a healthy retirement involves addressing two factors -- ensuring there are provisions for any health problems as well as a plan for healthy habits and practices.
Health benefits from Medicare are really only the beginning. Supplemental policies are needed, as there are deductibles, co-pays, and other out-of-pocket costs that must be covered. Living longer has also dramatically increased the need for long-term care, whether at home or in a nursing facility. Healthcare planning is an important part of retirement planning, and should incorporate not only the discussions of medical benefits but also appointing a health care proxy -- known as a Medical Power of Attorney -- as well as Advance Medical Directives.
Planning to Support Extended Family
Another increasingly common concern among those planning their retirement income is caring for extended family -- parents, siblings, adult children, even grandchildren. This can include financial assistance, housing, education, or healthcare costs. What is the possibility that you may have to help care for a family member in your retirement years?
Achieving Retirement Peace of Mind
Retirement is a process, not a single event. It requires careful planning to establish a game plan that accounts for the known as well as the unknown – the “what-if’s” that are so intimidating for people as they start to consider how they will design their retirement lifestyle. Thinking through these questions and defining how you want to live your retirement life requires a bit of soul-searching. Identifying and addressing major concerns early in the planning stages can be time consuming, but the time invested in this planning can result in you achieving your ideal retirement.
As I walk my clients through the various stages of planning for and transitioning into retirement, we work through these concerns to help them plan how to:
• Define their retirement life;
• Provide for retirement concerns; and
• Create a retirement spending plan
Call us today to let us help you begin the journey into your ideal retirement.