What is the purpose of retirement planning?
When most people think of retirement planning, they think about things like 401Ks, Roth IRAs and obtaining a certain level of savings. We might skip over the purpose of doing all this retirement planning. What are we saving for? And, most importantly, where do we see ourselves after retiring...and years later?
We’ll discuss why retirement planning is so important, including all the usual steps. However, we’ll also discuss other aspects of planning that often get overlooked. These may actually be most important to your life in retirement. This all starts with where you want to be as you get older. By where we don’t just mean the physical place (though that is something to consider) but how you picture your ideal life.
Retirement Planning With and FOR Purpose
Start by thinking of people you know at various ages. You might look at your own aging parents and people you consider role models of good aging. One that comes to mind is Margaret Atwood. If you’re a reader, you probably know her...and she’s gained a new fan base since her book The Handmaid’s Tale was turned into a TV series. Recently, she published the sequel to that book. What you may not realize is that she is about to turn 80.
People are doing more and living healthier, purposeful lives well beyond the typical “retirement age”. Retirement can be a time of reinvention or continued creativity. You may choose to focus on family, travel, or wellness. Most important, however, is the intention and purpose of this time of your life. You might have heard an anecdote about a man who worked hard all his life, retired, and died shortly thereafter. Studies show it is quite often the opposite. However, retirement just might kill you...or make you miserable...if you’re the person who lives for nothing but work and then just stops with no plan.
One of the common denominators in “blue zones” (longevity hot spots) is having and cultivating a sense of purpose. This includes having social connections and a feeling of belonging. It doesn’t make sense to save up your money to retire and sit alone in front of the TV. That may sound good for a momentary break, but it’s not a long-term plan.
It’s also important to get on the same page with significant others. This doesn’t mean you have to have the same interests and activities, but you should discuss goals and expectations. And, don’t ignore how your relationship might transition. If one or both of you worked full-time, you may be spending significantly more time together and shifting roles. All of this can be positive, or could bring out underlying tensions.
Financial Planning for Choices
The usual focus on savings and investing does matter. Why? Because financial stability can offer you more choices. Knowing your “why” can also help motivate you to save and spend wisely. What you want to do with your money and how you want to live informs what you’ll need. The earlier you can begin your retirement planning, the better. Find trustworthy professionals for advice and use automated savings tools to ensure you put money aside. Managing your finances and budgeting can be easier with all the technology available today.
Read “How Much Money Do I Need to Age the Way I Want?” to learn more about the costs of retirement and get pointers from our experts.
This Could Derail Your Retirement Planning
Did you know healthcare will likely be one of your largest expenses in retirement? Does your retirement planning account for the average healthcare expenses of more than $200,000? If not, those costs could easily derail the best-laid plans. We offer tips to help you plan ahead and get healthcare costs under control. Long-term care costs add another layer on top of this, and can be budget-breaking.
Beyond the costs, you need to plan for the logistics of potentially managing any care you might need. Execute advance directives, talk to loved ones about what you want, and organize your records. Get a good healthcare team and advocate on your side.
Planning for a Healthy, Happy Retirement
Where do you want to be? That could mean a place (or places) such as in your own home or moving to a warmer state. Perhaps you see yourself traveling more often, which might influence whether you want to keep your current home or downsize. More seniors are considering retirement communities too. They’re no longer just nursing homes, but offer all kinds of living situations and amenities.
This all means planning ahead. If you want to stay in your home, review how friendly it is for aging in place. Make small changes so it accommodates you as you get older. Click Here to get a free copy of our aging-in-place home checklist or schedule a comprehensive home assessment with personalized recommendations from our professionals.
Along with place, look at the things that will make you happy and how you picture yourself in terms of health, mobility and more. Our “Lessons from the Blue Zones” is chock full of ways to accomplish a balanced lifestyle in your later years. And, we offer easy fitness tips to help you keep moving...so you can do all the things you want. Saving money is one thing that will offer you choices, but saving your health is equally (if not more) important. Unfortunately, there are some things no one really tells you about getting older. Knowing them can make all the difference in your retirement planning.
These “frugal living tips” can also help you save money for and during retirement. It also helps to know about the resources available for seniors, and have proper expectations as you do your planning.