As you think about your own retirement date, consider three important factors:
- What will it cost to meet your daily living expenses and at the same time, do what you want to do with your time?An examination of how you spend and on what you spend is important as you approach retirement and endeavor to answer the age-old question: Will there be enough?
What will your retirement lifestyle cost? Everything needs to be thought about, decided upon and price-tagged.
There are no right or wrong styles – it’s just about how people live and spend money and they tend to see retirement as an extension of lifetime habits. There are different levels of expenses, such as the daily living expenses that all of us have – but depending on lifestyle, these can vary widely. Some people are accustomed to driving luxury automobiles – others have never driven anything but Chevy’s. Some routinely take European holidays while others are content to spend two weeks a year at the lake.
And what about those hobbies and activities you’ve been waiting a working lifetime to pursue but never had the time for? What will it cost to outfit your workshop with the tools you want to buy? What will it cost to buy the scrapbooks or the cameras or the sail boat you’ve always wanted to have and now that you’re going to retire, could actually use?
If establishing a budget on your own intimidates you, then call your financial advisor (that would be us), get a calculation of what your assets would produce in terms of income and have the advisor determine whether there are going to be shortfalls or surpluses.
- What will be your reason for retirement?Statistics indicate 23.7% of the retired population retired because of personal/family responsibilities.1 Does your situation present the possibility of needing to alter your lifestyle and even retire in order to “be there” for people you care for and love but who do not have the personal resources to pay for their care?
The sandwich generation are those whose parents or grandparents are living and need care and who also have children that need their assistance. It’s one of the problems with the baby boomers – who often married later than their parents and find themselves “caught in the middle.”
- What are you going to do with your time?I’ve never been busier! This is a statement often heard from retirees. Some legitimately get involved in activities – whether working for money or volunteering. Others have never been busier because they can spend an afternoon changing a light bulb simply because they have the time and have nothing else to do!
We suggest it is equally important to plan what you are going to do with your time and what you are going to do with your money.
One of the most troubling aspects of our jobs as advisors is to watch a retired client, who was always very active and busy when working, begin a rapid decline in energy and health as soon as he or she is over the initial euphoria of retirement. For some, boredom can set in so quickly – What was I in such a hurry about, if this is all that retirement is about?
And yet, there are others who have thought the thing through and can fill their days with stimulating activities and endeavors that require concentration and the use of the skills developed over their lifetimes so effectively that you catch yourself thinking aloud and saying to them: When are you going to start acting your age?
Retirement is just a part of the adventure called life – something different for each of us – the trick is to make sure that your retirement is everything you’d like it to be.
Money has a lot to do with it but the real challenge is to make sure that we are not bored, regardless of our financial status. Make sure you are having fun, enjoying and contributing!
And as the famous comedienne, Joan Rivers, would say: “Can we talk?”
1 “Working With Seniors: Health, Financial and Social Issues,” Society of Certified Senior Advisors, Revised 2003.