Retirement does not look the same for everyone. For some it might mean travel, for others it might mean relocating to a warmer climate. No matter what you might envision retirement to look like, many wonder how much it will take to make it happen. This article explores how you can better assess if you have what you need to maintain your lifestyle during retirement.
When Do You Want to Retire?
Many of us desire the flexibility that comes with retirement, whether that means retiring early or lightening your workload little by little so you can invest your time and energy into what is most important. Your age (now and in retirement) is one of the most significant factors to consider when planning for your future. If you want to retire early, you will need to make sure your investments are set up to start withdrawals without sacrificing growth. You will also want to run a variety of scenarios with different market timing to determine the best strategies to maximize your wealth.
What Does Life During Retirement Look Like to You?
Have you thought about the type of lifestyle you want to have in retirement? If you know you want to travel, play golf, or spend time with your grandkids, you need to factor in what that looks like, how much it will cost, and how you will make it happen.
For example, if you plan to travel, you will need to consider:
- Will you be traveling stateside or internationally?
- How often do you want to travel?
- How would you like to get there? (e.g., car or RV; first class on a plane or your own plane)
- Where would you like to stay? (e.g., 5-star hotel, Airbnb, with family members)
- Will you be traveling with your family? Would you like to cover their expenses too?
- Will you maintain your primary residence? If so, who will watch your house and maintain it while you are gone?
Even if your dream is simply to spend time with your grandkids, you will still need to think through your expectations. To some people, “spending time with grandkids” means babysitting a few times a week. To others, it means footing the bill for all-expenses-paid trips to various destinations of their choosing. Whatever it is you want to do with your time, map out the details so you can have a clear picture of how much you need to allocate to make it a reality.
Will You Have an Income Stream During Retirement?
Although you will not need to work during your retirement, it is a great way to stay active, keep your mind sharp, and maintain a sense of purpose. Some retirees choose to build a second career around things they are passionate about.
Or maybe you have an investment property you were thinking of selling once you retired, but having an income stream may be more beneficial, depending on your situation. No matter what you do, if you have a steady income stream during retirement, you will have more resources to afford even greater financial flexibility.
What Will Your Healthcare Coverage and Costs Be in Retirement?
Right now, you most likely have health insurance. When you stop working, you will need to secure healthcare coverage another way. You may be able to utilize your spouse’s plan if he or she is still working. Or you can get coverage through the healthcare marketplace. You qualify for Medicare starting at age 65, but even then, you may want additional coverage to pay for prescription drugs, dental care, eye exams, and other expenses.
Retirees sometimes fail to fully plan for expenses during the later stages of retirement, and medical care often tops the list. It is estimated that retirees will use 15% of their income for health expenses, and the average retired couple could see healthcare expenses of approximately $315,000 (after tax) after age 65. do not let this be a planning oversight that prevents you from retiring comfortably!
Will You Have Any Dependents?
Your kids may be grown and out of the house by the time you retire, but that does not necessarily mean you will stop supporting them financially. According to a recent study, about half of parents still give financial support to their adult children.
And even if you are not helping your kids out with daily expenses, you may want to contribute to their weddings, down payments on homes, or tuition for your grandkids.
Are You Planning to Leave an Inheritance for Your Family?
Most people want to leave a financial legacy for those they leave behind, but if you plan to pass your wealth to your children and grandchildren, it is important to make the transition as smooth as possible with a comprehensive estate and legacy plan. Be sure to consider what kind of legacy you want to pass down. Legacy planning allows you to incorporate family or financial values into your wealth transfer. If your children are not as adept at money management or have made financial mistakes in the past, your legacy planning can help guide them through what to do with their new wealth. Finally, legacy planning may help protect your grandchildren and encourage generational wealth-building for decades to come.
Do You Have a Charitable Giving Plan?
Do you want to continue your generosity when you are retired? What will that look like? Whether it involves setting up a foundation or leaving assets for charities in your will, a smart charitable giving plan can help ensure you continue to support the causes you care about. There is no lack of options when it comes to giving, so be sure to explore donor-advised funds, qualified charitable distributions, or charitable remainder trusts to not only bless others but also possibly minimize your taxes and maximize your gift.
How We Help
Determining how to fund your ideal retirement is not a one-size-fits-all formula. At Wellstone Wealth Management we help you determine a sound retirement approach that takes a close look at your potential retirement-income sources, including qualified-retirement plans, Social Security, and personal savings and investments. Schedule a complimentary introductory meeting by contacting us at 503-594-1210 or email@example.com.
Greg Allen is a CERTIFIED FINANCIAL PLANNER™ professional, Life-Centered Financial Planner, Managing Member, and second-generation owner of Wellstone Wealth Management, a life-centered financial planning firm that takes a unique Return on Life (ROL) approach to help their clients live the best life possible with the money they have. With over 20 years of experience, Greg holds fast to his mission of helping clients plan their finances around their lives, instead of the other way around, resulting in fulfillment, confidence, and a meaningful life. Greg also provides a caring, trusted long-term relationship and life-centered financial behavioral counseling. He specializes in working with people who have recently retired or are close to it (typically five years or less) and relates well to corporate executives and upper-management couples who often have complicated financial pictures and need help maximizing their wealth, reducing their taxes, and preparing for retirement so they can maintain their ideal lifestyle.
When he is not helping his clients find meaning and purpose, you can find Greg spending time with his friends and family, especially his wife, Sandy, children, and grandchildren. As a native Oregonian, Greg loves the outdoors, visiting the Oregon Coast, and retreating to their family cabin in the mountains. He enjoys staying involved with his church, reading, watching sports, and anything to do with exercise and wellness. To learn more about Greg, connect with him on LinkedIn.
Information provided herein is provided by Wellstone Wealth Management, LLC. This information is for general informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Information was compiled from third-party sources believed to be reliable and accurate but cannot be guaranteed. Investment advisory services are offered through Oswego Wealth Advisors, Inc., an SEC Registered Investment Advisor. Neither Wellstone Wealth Management, LLC nor Oswego Wealth Advisors, Inc render any legal, accounting, or tax advice. All investments involve risk, are not guaranteed, and may lose value. We recommend that all investors consult with a qualified adviser to assess your personal situation before implementing any strategy.
Please remember to contact your advisor when your financial circumstances or objectives change. Your advisor may recommend adjustments to your financial planning and investment strategies to better suit your current situation.