FYI: Unsure about the money? Read our guide: How Much Money Do I Need to Retire?
You may be looking forward to putting your feet up and enjoying retirement, but being retired and becoming retired are two very different things. To ensure your financial, health, and lifestyle needs are met during retirement, you need to plan accordingly.
By taking a moment to envision your retirement lifestyle, plan your finances, and put your affairs in order, you can ensure your retirement is as relaxing and fulfilling as you deserve.
FYI: Unsure about the money? Read our guide: How Much Money Do I Need to Retire?
No two retirements look the same, so it’s important to envision what your ideal retirement lifestyle looks like if you hope to make it a reality.
If you have a spouse, partner, kids, or grandkids, consider how they fit into your plans. The place you retire to will not only decide where you live and who you can see, but it may also change your financial situation through regional taxes.
If you’ve been a busy worker for most of your life, you’ll have to consider how to spend all your newfound free time after you retire. With your days free and clear, will you take up a new hobby, get a part-time job, or volunteer?
Whether you decide to retire to Florida, decamp across the world, or stay right where you are, you may not move again. Make sure you’re close to the people and places that are important to you.
Without a job, you will need to carefully plan your post-retirement income. Since 79 percent of retirees have multiple sources of income, you should consider these potential revenue streams as part of your plan:
Each type of retirement fund requires careful planning for when you should withdraw from them and how much. Each is taxed differently, as well, so it’s essential you talk to a financial planner about your unique financial portfolio to ensure you make the most of it.
Pro Tip: It’s never too late (or too early) to invest. If you’re just getting started later in life, read our rundown of the safest ways for seniors to invest.
A retirement budget can seem like a tedious and intimidating process, but it’s an essential part of your plan. You don’t want to run out of money when you need it most.
Once you’re living on a fixed income — regardless of the source — you will need a spreadsheet detailing your fixed monthly expenses. That should include your housing and mortgage, groceries, health care, taxes, definite medical expenses, and anything else you can think of.
The interest you pay on various debts can drag your retirement fund down, so include paying off any outstanding debts as part of your plan. Remember to try your best to leave enough money for an emergency fund.
Estate planning is not unique to retirement, but it can be an important factor in arranging your affairs since your estate likely has a beneficiary — as does your will.
Estate taxes also factor heavily into retirement finances, since you may be able to lower them by setting up a trust or converting assets into a Roth IRA. Creating an estate plan — from writing an inventory of your assets to setting your beneficiaries to finalizing your will — is much easier with the help of an estate-planning attorney or estate-tax professional.
Software platforms such as LegalZoom may also make the process quick and affordable.
Only 57 percent of Americans ages 65 and up have a life insurance policy, which is down about 10 percent from a decade ago. Many people had more coverage under their employer but lost it when they retired.
Life insurance pays for medical bills, burial costs, and outstanding debts. It’s an essential part of your retirement plan, but not all policies are made equal. Term life insurance covers you through a set period, whole life policies guarantee coverage for the rest of your life, and universal life is a flexible plan with whole life coverage and a death benefit, but a less certain payout.
Whatever policy you choose, prioritize one with a long-term care rider. This provision allows you to use money from your death benefit to pay medical care costs even while you’re still alive.
In addition to life insurance, retirees need to have health insurance to maintain financial security after they are no longer covered by their employers. Since the average health insurance premium for seniors hit $970 per month in 2023, a robust policy is a must.
Since you are eligible to enroll in a Medicare plan three months before your 65th birthday — called the Initial Enrollment Period — you need to look into plans to see what suits your needs. Medigap and Medicare Advantage offer different plans that cover different things, including varying coverage for prescription drug costs.
Talk with a family member or financial adviser about your health insurance projections before you turn 65.
In 2022, 79.5 percent of people ages 65 and up owned their homes. Securing your housing needs, both logistically and financially, is a significant aspect of retirement planning for most seniors.
Consider whether this will be your last home or you plan to move after you retire. If you plan to stay, invest in the longevity of your home by repairing any damage and improving its accessibility, such as by adding grab bars or ramps.
You may want to consider downsizing your home after you retire, especially if you aren’t supporting as many people as you used to. Since stairs can become a health concern as you age, consider downsizing to a single-story home and reducing your maintenance needs.
Finally, consider looking into care retirement communities if you have unique care needs.
With a little smart planning at the right time, your ideal retirement life could be just around the corner. Maintaining financial security is just one requirement for a happy retirement, but everything can be managed with the right plan, including your health care, estate, life insurance, and budgetary needs.
Speak with your family and consider hiring a financial adviser to discuss your retirement schedule and make a plan that will give you the relaxing retirement you deserve.
