Retirement today is very different than it was for your parents and grandparents. You can now expect to live longer, experiencing a healthy and productive life long past the time when they would have expected to leave the workforce. That means that planning for retirement look different too. Let's explore today's retirement to help you determine if you are ready.
Continue to Work
Many of today's seniors are continuing to work part-time for a few years before leaving your job completely. It will allow you to continue to have a regular source of income for a little bit longer. Plus, it will keep you an active part of the community and keep your days busy.
Look into a part-time job that you think you would enjoy. Not everyone is able to continue working part-time in their current job when they're ready to retire, but there are other jobs available that will offer you a variety of opportunities. For example, have you ever considered substitute teaching? What about working retail for a few hours a week?
Explore Your Passions
Use retirement as an opportunity to pursue your passions. If you're ready to plan for retirement, you have the financial foundation in place to allow yourself a little bit more freedom. Take the time to write that book you've always wanted to write, look into that volunteer opportunity you've always wanted to try, or pursue a hobby that you never had time for when you were still working. In many cases, those hobbies and passions can also become a source of income.
Implement a Fitness Routine
Physical fitness increases energy and stamina to enjoy the retirement years. A healthy diet, good hydration, and consistent exercise help to keep the body fit. Mental fitness allows the retiree to think clearly and actively into the golden years. Learning new activities that involve both the mind and the body, working puzzles, substantial conversation, and physical activity help to improve cognitive functioning.
Maintain Meaningful Relationships
When retiring, often long-term relationships are significantly altered or lost. Building meaningful relationships outside of work with family members, with others in a faith community, or with others who share a common hobby or interest can create an atmosphere to cushion the loss of colleagues and provide an opportunity for fitness and rewarding activity.
Don't go into retirement without proper planning. Generally, a person will need about 70% of their annual salary in order to retire comfortably. However, you need to know what kind of insurance coverage is available for you after retirement, what your actual expenses look like on a monthly, yearly, and even decade-long basis, and what you can expect from your investment portfolio over the years of your retirement.
When evaluating your portfolio, make sure you are not heavily invested in just stocks. Markets fall, and the result will be less income for your retirement. It is better to have a mix based on your level of comfort in investing risk. A well-balanced portfolio contains a mix of stocks and bonds.
In the years immediately preceding retirement, you're likely making more money than at any other point in your life. It's tempting to lavish that money on your loved ones. If you're able to do that without compromising your retirement plan, great! On the other hand, make sure that saving for retirement is a high priority. You don't want to reach the later years of your life and realize that you spent impractically during the early years of retirement or the years preceding it.
Research Your Location
Take into consideration the cost of living where you want to retire. You may have plans to move to a different state upon retirement. If you plan on moving and buying a house someplace else take that into consideration while planning your future expenses. The location you dream of moving to may have a higher cost of living and it is important to include that in financial planning.
Looking for more tips about planning for your retirement? Check out our Age In Place Timeline for more ideas on how to prepare.