Following the financial crisis of 2008, Steve and Mary made the difficult decision to put off retirement.
Even though they had sufficient savings, it didn’t feel right.
With all the doom and gloom around them, none of their “happy retirement” plans looked likely, including spending time with their grandchildren, purchasing a modest lake property, and taking a trip to Greece.
Even though we performed numerous stress tests and visualizations on their financial plan, it still wasn’t adequate.
The choice had been made.
Their contented retirement would have to wait.
Did Mary and Steve ever take a break?
More about them soon.
Situations like this happen frequently.
But one need not wait for a financial catastrophe to question whether they will ever be able to retire.
There are several aspects involved.
Here are 15 ideas to help you achieve your goal of a happy retirement.
1. Control Your Spending!
The single important step toward ensuring that you never outlive your money maybe this one. It’s particularly crucial in the early years of retirement.
When that time comes, you might look at your retirement portfolio and figure you have enough money saved up to last for the next 20 or 30 years. That might be the case, but not if you spend all of your savings right away.
It’s simple to imagine your retirement as a protracted holiday. From the perspective of not needing to work, that may be the case, but you definitely don’t want to be spending your money at rates comparable to vacation levels.
Costs for seniors’ personal and health insurance can easily spiral out of control. Add one of the Medicare Supplemental Insurance Plans, generally known as Medigap Plans, to your existing Medicare coverage to ensure the security of your nest egg.
You’ll need to manage your money in much the same way you have your entire life, making sure to live within your means unless you are a multi-millionaire.
The day you retire doesn’t suddenly change that. It becomes more crucial than ever in a variety of ways.
2. Make Time for Family
Do you remember when your children were small if you had any?
Ever wished you could have spent more time with them back then?
When your children are small, there isn’t always a lot of quality time due to job and domestic duties.
You’ll have plenty of time after retiring. No, you cannot go back in time to make up for the lost time in your earlier years. However, you could decide to spend more time with your family.
Particularly if you have grandchildren, this is crucial. Your grandchildren will be young for a short time, just like your own children were. Since your time is no longer consumed by work, enjoy your time with them.
This was really significant to Mary and Steve. With another one on the way, their first grandson had just turned one. They were elated to spend time with in retirement.
3. Don’t Get Burned on Taxes
If you are like the majority of retirees, the majority of your retirement savings were just tax-deferred, not tax-free. That implies that when you withdraw money from your retirement plans in retirement, it will be taxed. You must handle those withdrawals in a way that reduces your income tax obligation.
If you continue to have active income sources after your retirement, such as a business or part-time work, this will be especially crucial early on. Less money should be taken out of your retirement plan as you earn more from these sources. As a result, you will be able to postpone paying taxes on your retirement funds until after you stop getting the extra income.
Contrary to popular belief, many wealthy retirees actually make more money in their golden years than they did in their working years. When you receive revenue from several different sources, it might happen with ease.
Despite the fact that no one source can completely replace the income you had throughout your working years, a combination of several can easily surpass it. Taxes can therefore continue to be an issue even after retirement.
4. To stay active, take a part-time job.
Having part-time work may be a great way to stay active, even if you don’t need the extra money. In addition to keeping your intellect fresh, doing this might also keep you socially active.
Despite the fact that we typically associate making a living with financial matters, there is a deeper social component than we might realize. Work offers us a feeling of direction and keeps us socially engaged. It’s likely that during your working years that many of your friends were also your coworkers. Retirement doesn’t require a change in that.
Remember that you still have decades of life ahead of you if you retire in your early or mid-sixties. You’ll need to use that time for something productive and engaging with others. Both are possible with part-time work.
5. Remember to purchase long-term care insurance
Most of us don’t want to spend too much time contemplating this retirement dilemma. Ironically, the longer lifespans of humans are actually raising the possibility that some type of long-term care will be required in the far future.
Given this, it is usually recommended to purchase any sort of insurance as early in life as you can, and when you are in excellent health. At such time, the cost will be the lowest, enabling you to choose the coverage that will provide you with the finest benefits.
6. Organize your Estate planning
Even if you have delayed estate planning in the past, you have reached a point in your life where it is no longer possible to put it off. This is especially true if you have a sizable amount of equity in your home and significant retirement funds. To ensure a smooth transfer of your assets to your loved ones after your passing, estate planning is essential.
A will does not always succeed in that endeavor. The benefit of estate planning is that it not only lays out a plan for how your estate will be divided, but it can also provide extra financial resources, should they become necessary.
For example, if you have a sizable estate, income taxes can apply to that estate. You can obtain a life insurance policy that will pay the taxes if it is and the liability will be substantial. This will guarantee that your loved ones will benefit fully from the entirety of your current estate.
7. Be Totally Aware of Your Monthly Subsistence Needs
Even though sticking to a budget in retirement may seem unappealing, it’s also vitally necessary. Without a budget, it’s highly probable that you’ll burn through your retirement funds far sooner than you’d like.
Ideally, you planned for retirement by developing ways to cut your living costs. This might have involved paying off your mortgage, consolidating your debt, and cutting back on spending tied to your job. With all of that work, you need to require the least amount of cash possible each month to cover essential expenses.
The amount of money you spend on optional items and activities, however, will still need to be carefully managed and budgeted. A budget will be important when you’re retired because you’ll need to find things to do and buy to pass the time.
8. Have a Good Financial Advisor
It might be difficult to manage a sizable retirement account, particularly if you’re thinking about retiring soon. You might even discover that your interest in it has decreased from when you were collecting it during your working years. This is where hiring a competent financial counselor can be well worth your money.
A financial advisor is able to take a detached view of your circumstances, make observations, and devise plans that you might not even be aware of. The fact that the financial landscape is always evolving and becoming more complex must also be taken into account.
You might notice that you have less understanding or patience as you age. It is therefore advisable to establish a solid rapport with a qualified financial counselor very early in your retirement years.
9. For safety, put a portion of your assets in an annuity.
Retirement investors face a dilemma when it comes to investing, at least given the current market conditions. For a stable cash flow, interest on fixed-income investments must be higher. Investing in stocks is significantly riskier than it is with fixed-income investments, despite the fact that it has been profitable over the previous few years. You might choose to invest at least some of your money in an annuity because of this.
The correct annuities can be a sort of insurance that can retain your income and protect your investment principal, but not all annuities are worthwhile (avoid variable annuities). For instance, you can invest money in an annuity to guarantee a lifetime income without suffering a significant loss of value each time the stock market declines.
10. Have a Portion of Your Assets in AssetLock™
Stock investing is risky, as I just mentioned. Retirement and risk are two elements that don’t go well together. Let’s get right to the point: from the perspective of a retiree, the prospect of a stock market crash is the scariest part about investing in stocks. However, since the current interest rates won’t allow for a pleasant retirement, stock investing is also imperative.
The issue then is, how to protect your retirement portfolio from market crashes.
In fact, there is a tool available that can assist you in doing precisely that.
It is known as AssetLockTM.
You can choose a fixed amount of downside (loss) that your portfolio should endure throughout the course of the investment period.
It resembles a stop-loss order for your entire portfolio in certain ways.
For instance, you can establish a loss limit at any amount that makes you feel at ease, whether it be 5%, 10%, or 20%.
This will prevent you from being caught off guard by unexpected stock market reversals.
Your home computer, mobile device, or tablet can be used to check your limitations and make adjustments.
It could take years to recover from the 50% loss in your stock portfolio. As a current retiree, those may be years that you won’t have. If it is possible to reduce that loss to, let’s say, 15%, you will have avoided the worst of the market meltdown. You may achieve it with the aid of AssetLockTM Value.
11. Make Out a Bucket List
The majority of us have plans and goals for our lives, but work has a way of making us put things off. The issues of time and job are no longer there after you are retired. That implies that the things you’ve wanted to do your entire life but haven’t had the time to complete are now finally yours to do.
This is why creating a bucket list is so crucial. Simply said, a bucket list is a list of things you want to do or achieve in your lifetime. Two things motivate you to put this in writing:
- Prioritizing the objectives that are most essential to you will be made possible by writing down your goals.
- This makes them more important and likely to be achieved.
Retirees should take advantage of this opportunity as soon as possible because it is one of the more enjoyable hobbies for them.
12. Never Stop Learning!
Recall when I stated having a part-time job could help you stay active. Learning allows you to achieve that as well. We miss so much of the world while working because it is much bigger than any of us have time for. However, once you retire, you’ll have the time and focus necessary to learn a wide variety of subjects that you couldn’t previously.
It’s a great time to learn a new skill right now. For instance, you might have thought about writing, gardening, drawing, or studying a foreign language earlier in your life. You have the opportunity right now to start whatever activity you desire. Additionally, you’ll have plenty of time to learn and master it.
13. Keep Investing in Your Emergency Fund!
An emergency fund is one of those healthy habits from your working years that has to continue into retirement, much like keeping a budget. You’ll still experience crises in retirement, those huge unanticipated costs that appear out of nowhere.
You won’t need to use your retirement funds every time you incur an unforeseen expense if you have an emergency reserve.
This will also be a crucial tax planning move.
Income taxes apply to anything you withdraw from a qualified retirement plan. This means that your expenses would go up due to the tax liability if you use your retirement savings as an emergency fund. A well-stocked emergency fund can avoid the need to use your tax-sheltered savings accounts to cover unforeseen costs.
14. Take even better-than-ever care of your health.
Make a commitment to at least maintaining and, ideally, enhancing your current level of health. As we become older, our health becomes increasingly important and should never be taken for granted. No matter how closely you adhered to your financial retirement plans, if your health deteriorates significantly, your life will alter, potentially irrevocably.
Start an exercise regimen the day you retire if you’ve never done so before. Additionally, make a commitment to regularly visit the doctor and, whenever possible, change your diet.
Higher energy levels and a more positive attitude toward life are both products of good health. When you retire, you’ll experience a lot of changes, beginning with the end of a lifetime career. You can get through that and live a higher quality of life with the aid of good health.
14. Travel to more exotic locations as soon as you retire.
Generally speaking, the earlier in your retirement you can start your travels, the farther or more exotic the destination. Of course, health is a significant component of this. While you’re still relatively young and in good health, you want to make sure that you’re pursuing the most daring travel endeavors.
Additionally, if you intend to visit remote regions like a jungle safari or the Himalayas, you might find that they are too far away as you get older and more reliant on other people and the healthcare system.
Happy Retirement to Steve and Mary
Returning to Steve and Mary
Finally, they were able to retire. Due to their continued passion for his work, Steve planned to delay retirement by four years. After three years, his employment role had considerably changed, and he was ready to leave. We ran a few more examples, and I was able to convince him that he and Mary could retire in luxury.
He resigned since it was all he need. That was more than three years ago, and since then they have visited Paris and Greece twice, as well as spending a significant amount of time with their grandchildren.
In actuality, they are content in their retirement.