Retirement has transformed into much more than simply the light at the end of your career’s tunnel. Today, retirement consists of something different for everyone—it could include picking up a new hobby, taking on a less demanding role at work, spending more time with family, volunteering, traveling the world and much more. Retirement can take on many forms and with life spans continually increasing, retirees are enjoying more time in this phase of their lives.
Wherever retirement takes you, you will want a comprehensive financial strategy in place to continue your lifestyle and ensure you have the resources you may need.
How to afford a comfortable retirement is one of the top financial concerns of most individuals.1 Whether you are starting out in your career or a few years out from your desired retirement date, there is plenty to consider on how to contribute to your retirement goals. Several topics to reflect on include:
Identifying several goals for your retirement is crucial in developing your overall strategy. What will your retirement look like? Consider if you will want to continue working and earning an income or if you would rather spend your time doing other things you enjoy. While your plans may change over the years, identifying your goals ahead of time can help you to better prepare for unforeseen events. Another item to factor into your retirement strategy is how to reduce any outstanding debts you may be carrying into retirement. Prioritize taking care of your debt ahead of time to relieve stress in the future.
Factoring into your overall strategy will also be which retirement funding options you will utilize and where your income will come from. If you are already contributing through a specified retirement funding option, are you investing enough? Should you increase your contributions or consider supplemental options to utilize?
You have a number of options for your retirement income to be comprised of, including Social Security, pension plan, 401(k) or 403(b), IRAs, Roth IRAs, personal savings and investments, annuities, life insurance and continued employment.
How will you plan for your sources of income and factor those into your budget?
Whether it is helping out a child who has moved home, helping to fund a grandchild’s college education or helping to financially support the health care costs of an aging parent, many retirees are supporting themselves while also helping out loved ones. Providing financial support to loved ones can often be an unexpected cost, yet preparing for the possibility can help keep your savings on track and your retirement strategy in place.
Retirement often leads individuals to reconsider where they want to settle down. Where will retirement take you? Will you downsize or remain in your current residence? Will you move somewhere new? Items to take into consideration include whether you would like to be closer to family, if you would prefer a smaller home with less maintenance or if you would like to relocate to a more accommodating climate. Your living arrangements will factor into your budget as well as to your overall wellbeing.
For these considerations and many more, a financial advisor can provide insight into preparing for retirement and developing a strategy appropriate for you and your family.
1Brenan, M. (2019, April 30). Americans Feel Generally Positive About Their Own Finances.