Do you have a retirement strategy? For many people, retirement planning consists of contributing to their 401(k) plan or IRA every year. When you’re young and have many years until retirement, your strategy should focus on savings and asset accumulation.
As you get closer to retirement, however, you may want to think about more than just the dollars and cents of retirement. It’s important to save assets, but it’s also important to consider how those assets will be used when you leave the working world. That means planning your lifestyle and your activities during retirement.
Below are four questions you may want to ask yourself as you develop your retirement strategy. These questions can help you think beyond the financial aspect of retirement and focus on lifestyle, relationships and even your health. That could inform your decision-making as you approach retirement.
How will you spend your free time?
Believe it or not, many retirees struggle with their transition into retirement. Certainly the free time with an open schedule is one of the most appealing aspects of leaving the working world. However, some new retirees feel a lack of purpose. Some fill their newfound free time with costly activities such as travel, shopping and new hobbies. They spend too much in the early years of retirement and then struggle financially in the later years.
Think about your retirement and how you want to spend your free time. What activities or causes are most important to you? What does your ideal day look like? Then think about how you can achieve your goals in the most cost-effective manner. For instance, maybe there are opportunities for you to volunteer or even work part time in an area that interests you so that you can enjoy yourself without spending a substantial amount.
How will you maintain social relationships with friends?
Loneliness can be another challenge for retirees. While you may not like the idea of going to work every day, it’s likely that you have work friendships. Work is often the primary socialization opportunity for many adults. With work absent from your life, you may feel disconnected from others.
How can you stay social and connected without your colleagues and co-workers? Are there groups you can join? For instance, if you enjoy gardening, is there a local club in which you could participate?
Also, think about your relationship with your family. Do you want to use your free time to spend more time with children and grandchildren? If so, how often and at what expense? Many seniors spend unconditionally when it comes to family, even when that spending threatens their own financial future. While you may want to support and visit your loved ones, it’s important to budget those items.
Where do you want to live?
Your living situation can have a big impact on your retirement budget and your quality of life. You may want to stay in your family home. However, it’s important to consider all your options. It’s possible that downsizing could reduce your living expenses. Also, the sale of your home could provide you with more assets to fund your retirement.
Also, think about your neighbors and surrounding community. Would you prefer to live in a younger, more active neighborhood? Or would you like to live near peers and fellow retirees with whom you could socialize? Also, what’s the cost of living in your area, and could you reduce it by moving to another area? These are all important questions to consider.
What’s your plan to protect your health?
Finally, health care usually plays a major role in many retirees’ lives. As you get older, you may be more susceptible to injury and illness. You may require surgeries or ongoing treatments, and those services could be costly.
Medicare will help cover some of the costs. However, you can reduce your risk and exposure by investing in your own health. Think about ways to improve your wellness. Perhaps you could reduce or eliminate unhealthy habits. You may be able to improve your diet or exercise more frequently. Your doctor can help you develop a health care plan that minimizes your risk for serious health issues.
Ready to develop your retirement strategy? Let’s talk about it. Contact us today at Sprouse Financial Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
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17598 - 2018/4/19