One of my favorite questions for retirement I like to ask pre-retirees is: How do you picture your future in retirement?
It’s a big question, I know. Probably one that has an answer that has changed over time and maybe evolved in more ways than one.
If there’s one thing we know about retirement is that it looks completely different for everyone. Whether it’s how we spend our time, where we spend our time, or with whom, it seems that retirement looks and feels different from person to person.
The Top Questions for Retirement: Answered
One thing that always comes up when I’m chatting with pre-retirees is that they feel a bit overwhelmed when looking at their entire retirement and trying to plan for it. They try to answer that big question and, zap: analysis-paralysis.
But for today, I wanted to touch on a few easier questions to ask when looking at making the jump into retirement, or maybe which direction to steer your retirement next. Let’s dive in:
What do you absolutely need to accomplish in retirement?
If you could only get four or five things done in retirement, what would they be? Answering this question might lead you to compile a “short list” of life goals, and while they may have nothing to do with money, the financial decisions you make may be integral to achieving them.
What would revitalize you while in your retirement years?
Some people retire with no particular goals at all, and others retire burnt out. After weeks or months of respite, ambition inevitably returns. They start to think about what pursuits or adventures they could embark on to make these years special.
Others have known for decades what dreams they will follow… and yet, when the time to follow them arrives, those dreams may unfold differently than anticipated and may even be supplanted by new ones.
In retirement, time is really your most valuable asset.
With more free time and opportunity for reflection, you might find your old dreams giving way to new ones. You may find yourself called to volunteer as never before or motivated to work again in a new context.
Related: How to Mentally Prepare for Retirement
Who should you share your time with while retired?
Here is another profound choice you get to make in retirement. The quick answer to this question for many retirees would be “family.”
Today, we have nuclear families, blended families, extended families; some people think of their friends or their employees as family. You may define it as you wish and allocate more or less of your time to your family as you wish (some people do want less family time when they retire).
Regardless of how you define “family” or whether or not you want more “family time” in retirement, you probably don’t want to spend your time around “dream stealers.” They do exist.
If you have a grand dream in mind for retirement, you may meet people who try to thwart it and urge you not to pursue it. (Hopefully, they are not in close proximity to you.) Reducing their psychological impact on your retirement may increase your happiness.
How much will you spend in retirement?
We can’t control all retirement expenses, but we can control some of them. The thought of downsizing may have crossed your mind.
While only about 10% of people older than 60 sell homes and move following retirement, it can potentially lead to more manageable mortgage payments.
You could also lose one or more cars (and the insurance that goes with them) and live in a neighborhood with extensive, efficient public transit.
Ditching landlines and premium cable TV (or maybe all cable TV) can bring more savings. Garage sales and donations can have financial benefits as well as helping you get rid of clutter, with either cash or a federal tax deduction.1
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your overall tax strategy.
Could you leave a legacy?
Many of us would like to give our kids or grandkids a good start in life, but given some of the economic realities of today, leaving an inheritance can be trickier than many realize.
Consider a couple with, for example, $285,000 in retirement savings. If that couple follows the 4% rule, the old maxim that you should withdraw about 4% of your retirement savings per year, subsequently adjusted for inflation – then you are talking about $11,400 withdrawn to start. When you combine that $11,400 with Social Security and other potential investment income, that couple isn’t exactly rich.
Sustaining and enhancing income becomes the priority, and legacy preparations may have to take a backseat. On the other hand, a recent survey showed that 92% of all respondents believe it is important to leave money and other assets to their children.2
Related: The Major Risks to Family Wealth in 2022
One of the most important questions for retirement: How are you preparing for retirement?
This is the most important of all of the questions for retirement.
If you feel you need to prepare more for the future or reexamine your existing strategy in light of recent changes in your life, I’d love to set up some time to chat.
We’re happy to work with you either in person, over the phone, or virtually, based on your preference. Give our office a call and we can schedule some time together.