Are you looking forward to retirement?
Will it be all play, more time with family and friends, more community involvement, travel, a new career, or a little bit of all of the above?
While it’s important to acknowledge that our lives change at the time of retirement, we also need to consider that we will no longer have a daily routine — no rushing through morning traffic to get to the office, construction site or classroom. Did you know that, on average, people are spending around 20 years in retirement? This is true, so whatever you are considering, you should at least start putting together a to-do list. Careful planning and decision-making are key to having a better transition to retirement.
Questions to consider:
- Are you going to continue working?
- Do you have to continue working?
- What kind of work would you like to be doing?
- What are your goals and priorities?
- What are your sources of income and benefits?
- What do you want from the rest of your life?
- What do you want from your retirement?
- What have you done already to help make these things happen?
- Who will replace your work-friendships?
The retirement planning process can be overwhelming, and it is definitely on-going. We need to remember it’s not something we can plan out overnight.
Consider the above questions and the timeline below:
If you are five years from retirement:
Baby Boomers who have been preparing for retirement have, unfortunately, been hit with two severe reversals in the last ten years. Stock portfolios have taken a beating, and home equity values have plummeted, leaving many fifty and sixty year-olds facing a daunting future.
It’s time to seriously start thinking and planning for your future retirement decision and, even more importantly, to start taking some action. It’s certainly time to start working with a financial professional, get details about your potential sources of income from your employer (government benefits, etc.) and continue to move along your path into retirement.
What's good to know is that your Social Security monthly benefit increases eight percent a year for each year delayed from age 62 until 70. Every little bit helps, but the typical Social Security formula will only cover about 35 percent of your retirement needs.
Start thinking about what you would like your identity, relationships, and purpose to be. Look at retiring as an opportunity to start a new chapter in your life.
If you are six to 15 years from retirement:
Start to focus on your vision of retirement, and begin discussions with a financial professional to align your financial and life goals.
Traditional pension plans that once helped fill retirement reserves are no longer prevalent. Many workers cannot count on this type of income upon retirement.
If you are 16 or more years from retirement:
Even though retirement is some time from now, it’s not too early to begin thinking about it. This will help you improve how to get where you want to go and how to plan for what you want.
The biggest challenge financially (and the piece that is most often left out) is health care costs. The unknown (i.e., the number of years a person will live, and the quality of his or her health) makes planning for expenses more difficult. Most people fail to take into account that they may have multiple stays in nursing homes, a cost that is not covered by Medicare.
Preparing for retirement is a responsibility that falls on the shoulders of each individual. Be sure to take advantage of retirement workshops sponsored by your employer, unions, credit unions, churches, nonprofit groups or government organizations. Be flexible and spread your retirement nest eggs around. A balanced portfolio includes not just money but social activities as well — travel, hobbies, volunteer work, exercise, and/or continuing education are just a few in a field of many.
Studies indicate that financial resources in retirement are important, but money is only one part of the equation for a happy and productive life after one stops working.
If we look for opportunities, fun, and friends, we will find them. If we look for things to complain about, or get upset over, we will find them too. So we need to focus on the bright side. We cannot choose what life brings us, but we can choose how we will respond.
Make sure you are wearing your !