Is your strategy for retirement simply to save as much money as possible? That’s not a bad idea. Perhaps you put money away in a 401(k), an IRA or even a health savings account. Asset accumulation is an important part of retirement planning, especially in the early years of your career.
As you near retirement, however, you may want to consider issues beyond dollars and cents. It’s important to think about not just accumulating assets, but also how you will use those assets in retirement. That means asking yourself questions about your desired lifestyle in retirement.
Below are a few questions you may want to ask yourself as you approach retirement. These questions can help you think beyond the financial aspects of retirement planning. They can also inform your spending decisions in retirement so you can protect your assets and your financial stability.
How will you spend your time in retirement?
You’re likely excited about the freedom you will enjoy in retirement. You’ll no longer be constrained by your work schedule, and you can spend your days as you wish.
You may be surprised to learn that many new retirees struggle with this freedom. They miss the purpose that came from their old job. They’re not sure how to spend their free time. Often, retirees fill their free time with costly activities such as travel and shopping. The risk is that you spend too much money in the early years of retirement and deplete your assets.
Think about how you would like to spend your time in retirement. What does your typical day look like? What activities are most important to you? How would you like to spend your time? Then think about how you can achieve these objectives in a cost-effective manner that won’t bust your budget.
How will you stay socially connected?
Many retirees also struggle with loneliness. Work is a primary socialization opportunity for adults. It’s a great place to develop friendships and lifelong relationships. Without work in your life, you could have limited opportunities for interaction with other adults. That could turn into loneliness, which could have a big impact on your happiness in retirement.
Think of ways you can stay connected to old friends or make new ones after you retire. Perhaps you could meet old co-workers for lunch. Maybe you could join a local club or group related to your interests. Perhaps you could even work part time to get out of the house. Be creative and think of ways to spend your time that also include socialization opportunities.
Also, think about your relationships with family. Many seniors love to spend time with their children and grandchildren and possibly even spoil them with gifts and financial assistance. However, be sure that these gifts fit into your budget. Don’t let your family assistance threaten your own financial stability.
What’s your plan to protect your health?
As you get older, it’s likely you may become more susceptible to injury or illness. Health care is usually a major expense for retirees. In fact, a recent Fidelity study found that the average couple will spend $280,000 on out-of-pocket health care costs in retirement.1
Medicare covers many health care expenses, but it doesn’t cover everything. However, you can reduce your risk by investing in your own wellness. Perhaps you could reduce or eliminate unhealthy habits. You may be able to improve your diet or exercise more frequently. Your doctor can help you develop a health care plan that minimizes your risk for serious health issues.
Ready to develop your retirement strategy? Let’s talk about it. Contact us today at J. Harris Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
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17598 - 2018/4/19