With so many people living longer today, it is more important than ever to make sure you have done your planning so that you can continue to enjoy your present way of life well into your 80s or even 90s.
As many of you know, I am a huge proponent of planning for the future, which should begin as early as your 20s. On my website you will find a page called Planning For The Future at Every Stage which has some guidance for each decade to help you get ready for the day when you want to fully retire. However, it is never too late to plan even if you are retired or approaching retirement. If you have planned well, you should revisit your retirement strategy to make sure it is still on course so that you can continue to enjoy your present lifestyle.
According to the US Census Bureau, by 2030 all members of the baby boomer generation will have reached age 65*, which has been the traditional retirement age. But interestingly, 19%** of retirees choose to continue working part-time. This is wonderful for keeping active, staying intellectually alert, and having some extra cash to spend. But working part-time also has tax implications depending on where you live, how much income and social security you receive, and the amount of money you must withdraw from your retirement accounts when you reach age 72.
Planning for Your Retirement Years
Here are just a few of the many circumstances you should think about as you approach retirement, or even after you fully retire but continue working part time, so that your lifestyle remains financially secure and comfortable for the length of your life.
Determine Your Retirement Annual Spend
- Make a list of all of your regular expenses – these should include such necessities as housing, transportation, food, insurance, and healthcare costs.
- Also include any non-essentials that you hope to enjoy such as vacations and travel, leisure activities and hobbies, gifts for family and friends, charitable donations, and the like.
- Establish how much you will collect from social security and any other income including retirement accounts and other investments once you are no longer actively working.
- Decide if you can securely retire based on this calculation or if you may need to retain or seek some part-time employment.
- If you plan to continue earning a sizable income, consider gifting money to your children and/or grandchildren while you are alive which will help lower your tax liability and enable your offspring to enjoy the money while you are here to see them enjoy it.
Lifestyle & Location
- Consider where you want to live, on a short- and long-term basis.
- If moving a long distance is in your future, have a plan for funding such a move and decide about the timing to make the move.
- Since every state has a different tax rate, where you reside in retirement may have a major impact on your lifestyle.
- Perhaps a second home or a vacation property is a choice that you would like to consider or retain if you already have one if it is within your means.
- As early as possible, develop an estate strategy that includes how you want to distribute your assets – cash, jewelry, real estate properties, artwork, etc.
- Make sure your will and living will, as well as health care proxy are current, and name a reliable executor to your estate.
- Be sure your closest family members have access to your digital assets including your Logins and Passwords for all of your accounts, websites, and social media platforms.
Other Things to Contemplate in Planning for Your Retirement
- The state of your spouse’s and your overall health
- If senior living or assisted living is a possible consideration, make sure that you have enough money to fund this decision.
- Living arrangements and financial changes if one spouse passes away.
- Be sure that your long-term care solution is still appropriate for unexpected serious illness or accidents.
- Consider pre-paying for your final arrangements including funeral plots and other preparations, and be sure your family knows your wishes.
- Create a reasonable withdrawal plan from your savings and investments that covers all of your needs yet stays within your projected budget.
- Decide when is the best time to start taking your social security.
Of course, the pre-retirement checklist will be different for everyone depending on their financial situation and assets, whether or not they are married, divorced, or widowed, and in which state they reside.
At Simon Financial Group we work with our clients to prepare them for a financially secure and comfortable retirement. If you would like to have a no-obligation conversation, please give me a call at 732-623-2070 or schedule a Zoom appointment on my calendar link calendly.com/simonsays-1. I look forward to speaking to you in the new year and helping you plan your strategy for a successful retirement.
Saul Simon is a registered representative of Lincoln Financial Advisors.
Simon Financial Group is a marketing name for securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Lincoln Financial Advisors does not offer legal or tax advice. Simon Financial Group is a marketing name for representatives of Lincoln Financial Advisors.