Retirement is a big deal.
In fact, it’s right up there with getting married, buying your first home, or having a baby. And as it is with any major life change, a bit of forethought and planning can go a really long way with helping you get the best out of your golden years.
So let’s discuss retirement planning. Specifically, I want you to think about your retirement in two major “buckets”.
The first bucket is your finances. Your expenses, your monthly budget, and the money you’re bequeathing to your loved ones. Keeping all of this straight ensures that you have the means necessary to live the life you’re planning for. The second bucket are your lifestyle considerations. Retirement really is a new phase of life, which frequently spans decades. So it’s important - but oftentimes overlooked - to consider your new priorities, how you’ll fill your free time, and the best strategies for making the big transition.
Let’s dive in.
The first consideration you’ll want to explore are your finances.
The more clarity you can achieve here, the better. Your ultimate objective is to craft a monthly retirement budget which you’re actually willing to follow. The key is balance. You want your budget to be tight enough so that you adequately preserve necessary resources for the long term, but also loose enough so that you can really enjoy your time!
Mapping Your Financial Landscape
Before you start budgeting, you’ll first want to map out your financial landscape in retirement. Here are some important issues that I want you to consider:
- Where Do You Plan to Live? Where specifically will you be spending most of your time in retirement? Once you know the location, you’ll then want to get a general estimate of the living expenses in the area.
- Your Detailed Living Expenses. Will you be maintaining a larger residence that can host your family and friends or will you be downsizing? Are you planning on multiple vacations throughout the year or just a few? Do you have any hobbies that require significant financial resources? Do you very best get an accurate idea of your projected monthly living expenses in retirement.
- Current Health, Medical Costs, and Life Expectancy. Determine how much you’re paying now for medical expenses. This gives you a baseline. Then gauge your current health level and see if you can get a general idea of how long you might live. This gives you a rough idea of how many years you’ll want to save for retirement. Remember that your medical expenses will generally increase as you age, and there’s a good chance you’ll live longer than expected due to advancing medical technology.
- And Your Legacy? When you pass, who will you be leaving behind and how much inheritance are you wanting to leave for these loved ones?
Crafting Your Budget
Once you've mapped your financial landscape, it’s time to craft your monthly budget.
Understand that a well-considered budget really is your best ally. So don’t shy away from the term or the idea. Think of your budget as the mechanism that ensures you’ll have enough resources throughout your retirement as well as preserves the legacy you reserved for your loved ones.
Remember that there’s no use in making a budget if you don’t follow it. So don’t tyrannize yourself here. Make it a budget that makes you excited to live life while also helping you achieve your longer financial goals.
Finally, don’t forget the peace of mind that comes from crafting and following a reasonable budget. When you follow your budget, no longer will you be worried about whether you'll have enough money for later. Instead, you’ll know that you did the hard work on the front end, and your mind will be clear to enjoy the time you’ve set for yourself.
Financial planning and budgeting is important. But it’s not all about money. There are multiple other lifestyle issues that are key to consider. Ultimately, it’s about really enjoying your retirement years. You worked hard during your career, and your retirement is the time to kick back and enjoy the fruits of your labor.
So when it comes to important lifestyle issues, the following are some considerations I want you to think about.
Your New Priorities
Many professionals center their identities around their careers, which is perfectly fine and often a big reason for their success.
But retirement is a new chapter of life - without that career. So the trap I want you to avoid here is feeling like you’ve lost your identity when you’re no longer working. And the way to avoid that trap is by making the mental shift towards new life priorities in retirement. Just ask yourself this question: in retirement, what will be my main priorities?
It could be forging closer relationships with your spouse, children, and grandchildren. Or maybe it’s engaging in volunteer work. Or perhaps it’s focusing on fitness, new education goals, or checking off a travel bucket list. Whatever you choose is up to you. But I do want you to consider and establish some new priorities in retirement.
Plenty of Free Time
What are you going to do with yourself when everyday is a Saturday? How will you spend all this new free time? This is the fun part, but it’s important to consider. And answering this question really just means making a more detailed plan based on the new priorities you’ve set for yourself.
So after you’ve established your new priorities, take some time to consider how you’ll effectively allocate your schedule towards them. For example, let’s say that your two main retirement priorities are strengthening your relationships with your family and improving your fitness levels. To figure out how you’ll use your time accordingly, simply take out your weekly calendar and schedule out blocks of time towards those priorities. After you’ve penciled in those Monday through Thursday weight-lifting sessions, and your grandson’s Friday night football games, your schedule will begin to fill up.
And I do want to make a specific note here about health and fitness in retirement. I really want to encourage you to make your physical and mental health a priority. Better health significantly increases your quality of life, your relationships, and also keeps your healthcare costs to a minimum. So do devote plenty of quality time on a weekly basis to the activities that boost you physically and mentally.
Transition to Retirement with Part-Time Work
You may find that diving into full retirement is more challenging than expected. If so, that’s OK and pretty normal. Many professionals transition to part-time, reduced hours, or contractual work in order to smooth out the full-time employment to full retirement change.
And scaling back your career slowly gives you more time to clarify and develop your new priorities and figure out how you’ll want to use your free time. And that’s not to mention the extra money you’ll be saving as you make your transition.
Your retirement years can be some of the best and most fulfilling years of your life. I hope you are looking forward to them! If you take the time now to plan, specifically with regards to your finances and some broader lifestyle considerations, you’re more likely to get more out of these years.
The lifestyle considerations are all up to you, but the financial planning is our expertise. If you would like to discuss how we can help you get financially established for your retirement, then you can schedule a call with us here. We’re looking forward to speaking with you!
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