Your retirement should be a time to relax and spend time with your loved ones without worrying about your financial situation in the future. If you’re thinking about retiring in 2021, here are some helpful tips and information to have as you start planning.
Meet with a financial advisor
Some of the aspects of retirement are complicated and require the assistance of a financial advisor to navigate successfully, like accessing your retirement benefits, enrolling in Medicare, and coordinating your Medicare and supplemental benefits.
Financial advisors are experts in retirement planning and can help ensure you’ve considered all aspects of planning. They can also assist you with paperwork to prevent any delays or surprises in retirement. Perhaps most importantly, they can take a look at your current investments and help you plan and prepare for any changes in the economy or stock market between now and your retirement date, reducing risk to protect your funds during these uncertain times.
Common services performed by financial advisors include:
- Helping you set goals for retirement and retirement savings
- Identify gaps in your retirement plan (i.e. areas in which your savings may not adequately support your lifestyle)
- Advise on maximizing returns on your retirement accounts
- Help you develop a strategy to pay off debt by the time you retire
- Assist you in planning for long-term healthcare needs and expenses
- Educate you on supplemental products like long-term care insurance, annuities, and supplement health plans
- Help you access and plan for Social Security Benefits
- Recommend solutions for managing your other assets like real estate
In many cases, the best way to find a financial advisor in your area is to ask friends and family members you trust who they recommend.
Be realistic about expenditures during retirement
As you plan for retirement, you may be expecting to spend less during your retirement years than you’re spending right now. There are a number of reasons people take this approach:
- Perhaps you’re paying expenses for your children yet, like tuition, that you expect to end by the time you retire
- You may be making mortgage or vehicle loan payments that you anticipate will be paid off by the time you retire
- You might be taking work expenses into consideration, like your commute or your uniforms, expecting that those expenses will be eliminated with retirement
This approach often leaves retirees living paycheck to paycheck, struggling to make ends meet when unexpected expenses arise or unable to enjoy travel and leisure in their retirement years. Instead, consider how your lifestyle may change during this phase of your life and expect to spend close to what you’re spending right now. Do you plan to travel more often? Go to more shows? Join your friends at the gym or a coffee shop every morning? Buy the car or vacation home you’ve been eyeing?
Keep in mind that most new retirees desire adventure, experiences, and luxuries they weren’t able to enjoy during their working and child-rearing years, all of which can lead to additional expenses in retirement. When you plan to spend what you’re spending now, the best case scenario leaves you enjoying retirement to the fullest without the stress and worry of financial shortfalls.
Consider changing needs
Thinking and talking about how your needs will change as you age can be uncomfortable at best, but it’s in your best interest to think about the realities of the aging process as you plan for retirement. By taking a realistic and low-risk approach, you can set yourself up for financial freedom.
Although it is our hope that you’re able to retire at home in good health, we urge you to consider what could happen. The most important things to consider as you’re planning for the next twenty or thirty or forty years include:
- Whether your home will continue to meet your needs as you age. Many people choose to transition to a single-level home, a condo with amenities, or a retirement community when landscaping, stairs, and other aspects of home-ownership become more difficult.
- Whether you may need additional help at home in future years, like home health care, housekeeping services, or lawn care services.
- It’s also important to consider the possibility that you may need assisted living, skilled nursing services, or even short-term inpatient rehabilitation at some point in time. All of these settings should be considered as you develop your retirement plans.
Other factors to consider include potential relocation to be closer to family; the need for a vehicle that’s more accommodating of limitations; and construction or home modifications to improve safety.
To learn more about luxury retirement options in Michigan and Ohio, contact the experts at Vista Springs today.