Baby boomers were never “average.” The generation wears uniqueness is a badge of honor. However, approximately 10,000 boomers turn 65 everyday. While we each have specific goals, ideas and financial circumstances, there are some things that apply to us all.
Here is some exceptional advice for both the average and extraordinary guy, gal or duo as you transition to retirement.
As you transition to retirement, almost everyone will make a lot of critical decisions including: When to stop working? When to start Social Security? Where should you retire? And more…
Be thoughtful about your choices and try out different scenarios – especially if you do not have significant savings. These decisions can have a dramatic impact on your quality of life in retirement:
Retiring used to be a big event with parties, gifts, an abrupt end of work, and the beginning of a lot of free time. However, these days more and more people are switching to retirement jobs or working part time before they quit the labor force entirely.
Other ways people tiptoe into retirement include:
Passive income is exactly what it says it is – income that you earn without very much effort. The most popular (and perhaps profitable) form of passive income is a real estate investment. However, you don’t necessarily have to be able to afford an apartment building to benefit from passive income.
There are a lot of different philosophies about how people approaching and already in retirement should be invested.
Some of the advice you hear includes:
The contradictory and sometimes irrelevant advice can be very confusing. The reality is that there is a no-one-size-fits-all all approach for retirement investments.
The best investment strategy for you will depend on the value of your assets, how much income you have from other sources, your monthly expenses, your goals for retirement, your desire for leaving an estate, and more.
You can try out multiple scenarios in the Retirement Planner. Experiment with different investment return scenarios and more. The transition to retirement may also be a good time to discuss your situation with a financial advisor. Just be sure to work with someone who has your financial interests in mind – not their own financial gain.
Retirement can be a long endeavor. If you retire at 65, you could easily spend 30 years enjoying life.
When you retire, you are agreeing to live off relatively fixed finances. As such, you really need to know how much you are going to spend when.
You will want to think about how your spending levels might change over time. Most people spend a little more when they first retire. Then, less as they get a little older. And finally more – mainly on healthcare – near the end of life. When thinking about your retirement budget, you also want to include any big one time expenses you might incur for things like education or travel.
The Retirement Planner let’s you do this kind of lifetime budgeting. Set as many different spending levels as you like. You can even set different levels of spending in more than 70 different categories and establish both nice to spend and necessary spending levels.
If you have not already done so, the transition to retirement is a good time to consolidate your savings and banking accounts to simplify your money management.
Too many people enter retirement with old 401ks and IRAs. Having multiple accounts can be difficult to manage and it may increase the fees you are paying.
A few tips for consolidating your accounts:
With so much to think about as you transition to retirement, sometimes the most important parts of life like friends and family can get a little lost.
Social connections are one of the most important factors for your emotional and even physical health. And, many people really miss daily interactions with people when they stop working.
As you think through your retirement plans, be sure to factor in your loved ones.
Have you ever benefited from networking for work? What about when you first had kids? Weren’t things a lot easier when you had other parents to talk with about diapers and being up in the middle of the night.
Wouldn’t it be nice to be able to chat and commiserate and brainstorm about retirement with your friends?
If this sounds appealing, maybe you could set up a retirement club – kind of like a book club, but you discuss retirement topics instead of the latest best seller. Possible themes for each meeting could include:
Research into financial literacy has found that your peers can have a huge impact on your success. In the same way having a work out buddy gets you exercising more, discussing finances with friends can be motivating.
Did you know that you need more than just a will? The will is important, but probably of bigger consequence to your own well being are your medical directives. What are your plans for a catastrophic medical event? What do you want to happen if you need some kind of long term care?
There is a lot to worry about as you transition to retirement.
Research from Merrill Lynch, “Leisure in Retirement, Beyond the Bucket List,” finds that most people have anxiety leading up to retirement, but find that once they take the plunge, they are very happy.
If you are worried about finances, dig deep and prioritize what is important to you. Keep your focus on your priorities and make sure you can do those things.
Just make sure that you are enjoying your time now, not only looking forward to the future. Here are 8 ideas for how to thrive as you transition.
Many people focus on the financial aspects of transitioning to retirement. However, it is really important for you to plan your retirement lifestyle. Retire to something, not just away from work.
Here are a few ways to find what to do in retirement or afford the most popular retirement activities:
Still worried? Studies find that having a retirement plan helps alleviate the stress.
The Transition to Retirement: 11 Exceptional Tips for the Average Joe or Jane
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
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