At Vision Wealth Management, Inc. we are committed to helping people in all stages of their retirement, from the planning phase, the transition phase and finally the fully retired phase. Today, we want to focus on the planning phase and three key questions to ask yourself before you retire.
- Will you be able to generate enough income to maintain your standard of living in retirement? Growing your nest egg is certainly important, but the balance of your retirement account is actually a less-than-ideal metric for assessing whether you’re making sufficient progress toward a secure retirement. One reason: a sum that can seem almost princely in absolute terms may still be far short of the amount of savings you’ll need to support yourself for a retirement that could last 30 or more years. So rather than homing in on “your number” or a particular dollar value you need your nest egg to reach, focus instead on whether you’re on track to replace enough of your pre-retirement income to allow you to live an acceptable lifestyle once the paychecks stop.
- How will you actually live in retirement? When retirement is still several decades away, it's okay to estimate how much you need to save by assuming that you’ll require, say, 70% to 90% of your pre-retirement income to be comfortable in later life. But once you get within 10 years or so of calling it a career, you want to get a more accurate fix on how much you’ll actually spend. Think seriously about how you’ll spend your time in retirement once your 9-to-5 schedule is no longer there to provide structure to your days and weeks. Among the questions you’ll want to address: Will you stay in your current city or town or relocate to a new area? If you plan to stay where you are, will you remain in your current home or downsize to something that's less expensive to maintain? Will you travel extensively, or mostly stay close to home? Do you envision working part-time, whether for the money or to stay in touch socially?
Do I have reliable healthcare coverage? Medicare kicks in at 65, and you’ll still need health care in the meantime. Make sure you factor the cost of paying for health insurance in your calculations. You may not know exactly what healthcare issues you’ll have, but you can count on the fact that you’ll need to head to the doctor for something during your early retirement years. Let us know if you have questions as you prepare for retirement. While this stage in life can be very exciting, it can also be filled with a plethora of questions.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.