Ready for Retirement? Assess Your Retirement Readiness with this Handy Checklist
As you look forward to your retirement — whether it’s two years or two decades down the line — you’re probably considering how you can prepare yourself financially to enjoy each moment of your retirement days. After all, you’re working hard for that big break!
Many investors prepare for retirement by considering questions like: “How much money do I need per week?” and “How long will my retirement last?”
These questions are important, but they don’t tell the whole story. For example, you might be able to pay your bills on a certain figure and save toward that target. However, if you haven’t budgeted for tee time, you’re never going to be able to recognize your dream of being the best golfer in your retirement community.
In addition to crunching the numbers, take some time to run through this retirement checklist to see whether you’re heading in the right direction with your retirement planning.
Who?
Who do you spend the most time with in a day? Your family? Friends? Colleagues? A volunteer network?
Now, think about who you’ll be spending your time with during retirement. Does the lineup change or stay pretty consistent?
Also consider who will be part of your health and wellness team. Are you going to maintain strong relationships with family members who will be able to assist you when needed? And are you planning to participate in the care of another family member or close friend?
Your social network is as important in retirement as it is now. Look at ways that you can strengthen relationships and prepare for longevity in your family and social connections.
What?
Visualize your first day of retirement. What are you going to wake up and do? Cook an impressive breakfast spread? Spend time with your grandchildren? Read a book?
The activities you do today might influence the activities that you’ll pursue in retirement. After all, you’re still going to be the same person. That being said, you will have more time to pursue various interests in your retirement years. Which ones will you choose?
More importantly, how can you make changes today to help you live a vibrant retirement lifestyle that’s fulfilling and rewarding? Should you set aside funds for future travels? Are you interested in a hobby that you can get started with to some degree even now? Look into opportunities to invest time or assets in thoughtful ways for your future enjoyment.
When?
To some extent, you’ve probably already considered the question of when you’ll retire. If you haven’t, it’s important to get a firm idea of what age you’d like to retire at and start taking steps to achieve that goal.
Your retirement age and the number of years that you think you’ll be in retirement are some of the biggest factors in determining the magic number for your total retirement income need.
Of course, age need not be the only factor in deciding a retirement year. Perhaps your asset level is a more pressing factor. If this is the case, simply adjust your retirement age to coordinate with the year when you anticipate that you’ll achieve the asset level at which you’ll feel prepared for retirement.
Where?
Planning your retirement “where” involves two parts: the location to which you wish to retire and the home that you’ll live in while you’re there.
Deciding on your retirement location can be tricky. Do you want to live close to family or in a destination you and your spouse have always dreamed about? Do you prefer an urban or rural environment? How about proximity to your favorite hiking trails or conservatory? Each investor will have a unique, very personal response to these questions.
Of course, budget should factor into your retirement location, as well. Some locales are inexpensive and offer a nice financial reprieve for those who have lived and worked in major cities for the bulk of their careers.
If you move, you might be able to comfortably settle into a home that’s grandkid-friendly for a fraction of what you would pay in your current zip code. But maybe you want to downsize anyway and location isn’t so important. Or perhaps you plan to live with family or in a retirement community instead of maintaining your own property during retirement.
Think carefully about how much time you want to spend “keeping house” during retirement when you decide on what type of house, condo, or community you’d like to retire to.
Why?
Research suggests that retirees who have a compelling “why” to their daily retirement lifestyle and routines stay healthier and more vibrant throughout their retirement. What’s your why?
When you’re not waking up every morning to head off to work, what will you be doing instead? Think about fulfilling activities, hobbies, volunteer work and travel that will enrich your retirement and give you purpose.
Planning your retirement isn’t something you can tackle in an afternoon. You might need to do some serious soul searching to paint a picture of the retirement lifestyle that will bring you joy and fulfillment.
As you determine the details of your retirement “who, what, when, where, and why”, your financial advisor can help you to connect the dots between the day-to-day retirement living you imagine and the financial resources that’ll help you work towards getting there.