Preparing for a Life of Leisure: Considerations for Retirement Planning

Most dream of a life of leisure, travel, and relaxation during retirement. After decades of work and preparation, you deserve to spend your time enjoying all you’ve worked for. However, as you plan for the retirement lifestyle of your dreams, it’s important to consider and strategize appropriately. From finances to health, planning and preparation continues beyond your date of retirement.

How Much to Save for Retirement

The first step to planning for retirement is of course, your finances. Do you know how much you need for living expenses when you retire? Where does your monthly retirement income come from? Is it enough?

You may see retirement as an extension of the present rather than the future. This is only natural, as we all live in the present, but the future will inevitably arrive. The costs you may incur later in retirement may exceed those at the start of retirement. As you may be retired for 20 or 30 years, it is wise to take a long-term view of things and work with a financial professional to strategize.

Longevity

As you think about how long you will live, it’s important not to underestimate your longevity. Actuaries at the Social Security Administration project around a third of today’s 65-year-olds will live to age 90, with one in seven living 95 years or longer. The prospect of a 20- or 30- year retirement is not unreasonable, yet there is still a lingering cultural assumption that our retirements might duplicate the relatively brief ones of our parents.

Withdrawal Strategies

You have likely heard of the “4% rule,” a guideline stating retirees should only withdraw about 4% of retirement savings annually. Some retirees try to abide by this, but others withdraw 7% or 8% per year. Why is this? In the first phase of retirement, people tend to live it up. More free time naturally promotes new ventures and adventures and an inclination to live a bit more lavishly. If you are going to overspend, be sure you have a strategy to address your retirement savings later in life.

Investment Strategies

You should expect retirement to have a few surprises. The absence of an investment strategy can leave you without money when those surprises arise. Working with a financial professional can greatly increase the probability you are able to live the retirement lifestyle you want.

Social Security Timing

The Social Security Administration calculations show annual benefits rise 8% for every year you delay receiving them. Waiting a few years to apply for benefits can position you for higher retirement income. Filing for your monthly benefits before age 70 can mean comparatively smaller monthly payments.

Retirement Planning Does Not Stop During Retirement

Statistically speaking for those retiring these days, there is good news; you’ll likely live longer and perhaps better than your parents and grandparents did. On the other hand, you may live a longer, more expensive life, too. Planning and strategizing for retirement doesn’t stop when you retire. In fact, they become even more important.

Professional Guidance

Working with a financial professional throughout retirement can provide direction, answers, and clarity, leaving you the time to enjoy your life! You’ll need to regularly adjust investment strategy to ensure your money can last as long as you do. Congress could adjust estate law, you may have health issues requiring long-term care, and more. You will have many questions throughout your retirement years, so work with someone you are comfortable with and trust.

Your Home and Health

As you plan for the future, consider the later years of your life. Is your home accessible for you to live comfortably when you’re 90 years old, or do you have a home with stairs? Who will care for you if you can’t care for yourself? If dementia or other mental health concerns arise, who will protect you from yourself? It’s critical to have a professional assist with real answers to these questions.

Staying Busy in Retirement

While some may see retirement as a 30-year vacation, too much free time leaves many retirees feeling depressed and unimportant. Studies show people who continue working or volunteering after 65 tend to be happier.

Mental Benefits

Remaining active during retirement helps maintain mental agility as you learn new skills, which can help improve your thinking ability. People who pursue meaningful activities say they feel happier and healthier.

Physical Benefits

Staying mobile during retirement years is crucial for continued health. Whether you choose to work full time, or volunteer a few days a week, engaging in some form of work will keep your body moving, and give you opportunities to stay balanced, strong, and healthy.

Financial Benefits

Beyond the extra income, working during retirement may allow you to delay taking Social Security benefits. With a delay, you are reducing the pressure on your investment portfolio and transferring market risk to the Social Security Administration.  

Emotional Benefits

Studies have shown a sense of purpose has been found to lengthen lifespan and quality of life. Working on something you care about, starting a new business, or mentoring others in the workplace can ward off depression and provide a healthy sense of fulfillment and direction in your later years.

Social Benefits

One of the risks associated with retirement is increased isolation, which in terms of its impact on your health, has been equated with smoking fifteen cigarettes a day. Working with others reduces this risk, giving you a chance to build connections and enjoy meaningful interactions.

In conclusion, as you prepare for retirement, it is critical to have a real plan in place. With steadfast strategies, our services work to ensure our clients enjoy the retirement lifestyle they’ve always imagined.

If you’re like many others, this can all feel a bit overwhelming. Take the first step by meeting with a financial advisor. Our Team at Buttonwood can assess your retirement needs and develop a plan for your unique situation. With our partnership, we can effectively strategize for the retirement you have worked so hard for. 

This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.