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My Children Graduated College. When Can I Retire? Thumbnail

My Children Graduated College. When Can I Retire?

Financial Planning

As a parent, seeing your children graduate from college is a significant milestone. It's a moment of pride and accomplishment, but it also often comes with the realization that a major financial responsibility is now behind you. Now that the kids are off your payroll, this naturally leads to the next big question:

"When can I retire?"

Retirement is a deeply personal decision, influenced by many factors beyond just the financial. Our goal is to help you balance both the financial aspect along with the lifestyle factors so you can live the retirement you desire. 

Life and Vision Planning: The Life Planning Aspect of Retirement

In retirement, every day feels like Saturday. It's essential to consider how you'll spend all your newfound free time. Identifying your daily activities is a crucial aspect of preparing for retirement. Believe it or not, we've seen many people struggle with the transition simply because they didn't plan for this part of their lives.

For many, work is more than just a job; it’s a significant part of their identity, providing structure and a sense of purpose and accomplishment. It's vital to find what will give you that same sense of purpose in retirement. While it may sound delightful to spend everyday golfing, gardening, or lounging at the beach, these activities might eventually lose their appeal without a deeper sense of meaning. 

Retirement isn’t just about finances; it’s also about how you want to spend your time. Take the time to think about what you want to do in retirement. Maybe you want to take classes, learn a new language, improve your cooking skills, take up golf, or travel the world. Whatever ignites your passion, be clear about your goals and what you want to achieve in this new phase of life.

Whether it’s traveling, volunteering, or starting a new hobby, make sure your financial plan supports these goals. This is actually the hardest and most important aspect of planning for a retirement well lived.

The happiest and most fulfilled clients I work with are those who have a well-defined life plan for their retirement. Additionally, considering volunteering or charity work can bring a profound sense of fulfillment. Think about where your talents can be used to make a positive impact on your community or even the world.

Make sure to prioritize your health and wellness by planning for medical expenses and considering long-term care insurance if necessary. Plan to exercise every day if you can. Walking, swimming and biking are all activities that can promote wellness and extend the quality of your years.

Also give consideration to Family and Community. Think about where you want to live and how close you want to be to family and friends. Studies show a clear link to longevity and a sense of community and purpose. Studies also show that living too close to your kids can be stressful too! The decision is deeply personal, but is worth spending time thinking about.

Your Financial Readiness

Now comes the easier part! One of the most critical aspects to assess before transitioning into retirement is to analyze your expenses. This is the number one driver of success in ensuring you do not run out of money during retirement. Our goal at Seaside Wealth Management is to prevent you from ever having to go back to work!

Make sure to estimate your current living expenses and project how they might change in retirement. Include line items for things like travel, hobbies, spoiling the grandkids, healthcare, and potential downsizing of your home. Rest assured, we will work through this process with you before you decide to retire, ensuring every detail is accounted for and your financial future is secure.

Pay off high-interest debt and consider strategies for managing any remaining debt in retirement. Consider paying off your mortgage. This is a deeply personal decision, and many factors go into it. We explore this concept in detail in this video:


Next, evaluate your savings and investments. Review your 401(k), IRA, and other retirement savings accounts. Are you on track to meet your retirement goals based on your current savings rate and investment growth? Should you consider increasing contributions now that the kids are off the payroll? Take advantage of catch-up contributions for your 401(k) and IRA. Consider contributing to an after-tax portion of the 401(k) plan if available to leverage the Mega Backdoor Roth IRA strategy. Check out Brad's Retirement Master Class where he covers Roth Conversions in depth.

With college expenses disappearing, consider increasing your savings in taxable investment accounts. These funds provide flexibility and supplemental income in retirement and become a great source of tax-efficient income during your gap years, allowing you to take advantage of Roth conversions.

Identify the different income streams you will have in retirement. Start with Social Security. It's important to determine the best time to start taking benefits, as delaying can increase your monthly payout. We will work closely with you to create a strategy to maximize your benefit in the most appropriate way for your financial plan.

If you have a pension, understand your payout options and how they fit into your overall retirement income strategy. Determine the appropriate survivor benefit if you are married to balance the need for high current income while ensuring your spouse is cared for should you pass away first.

Assess any other income you may be receiving. Many of our clients include rental income as a wonderful source of diversified income in their retirement plan. Also, consider whether you want to work part-time in retirement. For many, this provides a great source of “fun money” while enabling social interaction and keeping busy. While part-time work in retirement isn't for everyone, it's important to envision what your ideal retirement looks like.

At Seaside Wealth Management, we strive to help you navigate these decisions with confidence and clarity, ensuring your retirement years are truly the best years of your life.

Creating a Plan

As a client of Seaside Wealth Management, you have a detailed financial plan that covers every aspect of what it takes to retire in comfort and stay comfortably retired. Your financial plan serves as a blue print and a road map for the journey towards retirement and ultimately financial peace of mind. We help you to consistently act on your plan and confidently move forward towards your goals. And your plan is flexible because we realize that life changes, goals change and your needs and desires change. In fact, the only thing consistent in life is change. That is why we stress test your financial plan every time we meet together. This ensures you can have confidence that your plan will stand up to whatever the market and the economy throw at you.

Your retirement strategy is personalized and based on your goals and financial situation. Your investments are tailored to the plan and unique to you. we develop a personalized retirement strategy that includes investment recommendations, tax planning, and income strategies.

And remember, retirement planning doesn’t end once you retire. We provide ongoing support to adjust your plan as needed and ensure you stay on track. It’s a journey, not a destination.

Peace of Mind

Our clients consistently tell us that one of the greatest benefits of working with Seaside Wealth Management is the peace of mind we provide. Knowing that you have a comprehensive plan in place, tailored to your specific needs and goals, allows you to retire with confidence. So now that your kids have graduated college, it’s time to get serious about your retirement timeline.

Conclusion

Whether your children have just graduated college or you’re several years away from retirement, it’s never too early or too late to start planning. If you’re ready to take the next step, we’re here to help.

Contact us at Seaside Wealth Management to schedule a consultation and begin planning for a retirement that allows you to enjoy the fruits of your labor and the freedom to pursue your passions.

Education and Guidance

At Seaside Wealth Management, financial education and coaching are crucial for creating peace of mind around your finances and making informed decisions. Check out our articles and videos to help you get ahead in your retirement planning:

This commentary reflects the personal opinions, viewpoints and analyses of the Seaside Wealth Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Seaside Wealth Management, Inc. or performance returns of any Seaside Wealth Management, Inc. client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Seaside Wealth Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.