You may not have realized it, but last week was National Retirement Security Week. To honor it, I wanted to take a little time to talk about retirement income and what you need to do to get and stay on track.
Here are three key things to consider when it comes to planning for and living in retirement…and they may not be exactly what you expect.
- The money matters
First, of course, the money does matter. It’s important to develop a realistic understanding of what your income and expenses will truly be in retirement. As you know, there are actually many pieces of the retirement income pie, including savings, Social Security and any pension or retirement plan assets. And, there are many other considerations as well. Working together, we can look at:
- What your assets look like now and what they could grow to in the future
- What sources of income you have now and may have later (it’s common to overestimate the value and duration of alimony, for example)
- How much Social Security you are likely to receive
- How much Medicare and other health care might cost (we have an expert that can help you understand the choices you may need to make)
- What your living expenses and other liabilities may be
- What your tax situation may be (it’s common to underestimate your future tax bite)
- And more
But when it comes to retirement, there’s far more than just the money to consider.
- Envision the future
To get a true idea of what your retirement will be like, you should envision how you want to spend each day. Volunteering, working out and going to the theatre sound great, but can you really do that each day? You may want to consider the following questions:
Will you still work? If so, will you stay in your career or try a new job (see the next installment)? Take some time to imagine how you might feel if you were not doing your current career anymore. How tied to your career is your identity? Will you be happy if you are not doing that job anymore? It’s important to consider these things to help ensure you will truly be happy in retirement.
Now, if you will be going from full-time work to part-time, or to not working at all, consider how you will spend the rest of your time each day. If you dream of gardening, horseback riding, knitting, reading or other things, try to be realistic about how much time you will actually want to spend doing these things each day. It may not be as much as you think, so you will want to consider what else you will do each day.
If you plan to volunteer, consider which groups you will want to volunteer with and how much time you plan to volunteer each week or month.
Will you work out? If you worked out near your place of business, will you still go to that gym or will you need to find a new one? In fact, if you do a lot of things near your job, like shopping, socializing and more, you may want to think about where you will do things once you retire. You may no longer be willing to commute to do these things. And, if there are no facilities near you, or if you feel your home will be too remote once you retire, you may want to consider moving.
Another thing to consider is who you will socialize with. Where do your friends and family live? Are they close to you or far away? If you are going to be home more, perhaps you want to consider a community that is designed to be more social.
- Make a plan
Whatever you envision for your retirement and however many assets you may have, the bottom line is that you need a plan. Yes, things can change over time. The markets may go down, the tax laws may change, and you may make decisions that change the trajectory of your path. We believe that the key to successfully planning for and living in a secure retirement is to:
- Have a plan and regularly review that plan
- Have a professional you rely on to help you along the way
- Continue making decisions that keep you on track toward your goals
At Gasber Financial, we believe strongly in the power of planning and positive thinking. We can help you build and review a plan to help you achieve a secure retirement.