April is retirement awareness month here at Thorium and a large focus of the work I do is helping clients work towards their retirement goals.
One of the exercises I conduct with clients after we get through the initial planning work and begin to dig deeper into visualizing retirement is to ask them these 5 questions. These questions will help you imagine your future by looking at the major factors of housing, activities, lifestyle, life expectancy, and unexpected events. Answering these questions is vital because it helps to give shape to a retirement budget and your retirement income plan.
- Where will I live?If you live far away from kids you’ll need to build in travel costs or have extra space in your home for visitors. Is it an affordable location to live? If you plan to work in retirement is the job market good for the type of work you want to do? Does it meet your preferences for climate, culture, recreational opportunities, sporting life, and medical care?
- What will I do?How you plan to spend your time in retirement will largely determine how much income you’ll need. The classic life of leisure can be expensive. Unless you plan to spend your days reading, walking, and visiting with friends you may have higher costs than you anticipate. This is not to say you shouldn’t enjoy yourself in retirement it’s just that these expenses need to be factored into the budget.
- How well will I live?Living well is a matter of opinion. As you contemplate retirement consider how you will live your life. Will it be a simple life where you scale back and reduce expenses or will it be the high life where you eat out more, travel more and explore things that you couldn’t do while you were working? There is no right answer it is a matter of what kind of retirement you envision.
- How long do I expect to live?This is the million dollar question that, if answerable, would make retirement planning so much simpler. To be safe I usually try to help clients plan for an income need to last until the age of 95. If you want to see a more accurate calculator for your life expectancy you can visitwww.livingto100.com .
- What surprises does life hold?What are unexpected events that you might be able to anticipate as you move through your life? Do you have a history of health issues? If so then we may want to allocate more assets to cover potential healthcare costs in the future. Might your family need your help in the future? The financial crisis of 2008 taught us that anything can happen, including events beyond our wildest imagination. Adaptability is a key to managing life and money in the 21st Century.
Ask yourself these 5 questions as you near retirement and it will help you get a better picture of what your retirement might look like. If you want more in depth retirement planning help give me a call in my office.
A Thought from the Factory on Main
Peter Huminski, AWMA
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Past performance is no guarantee of future results.