5 Retirement Planning Must-Haves

To help assure a smooth transition into retired life it is important to take a close look at how well prepared you are. If you plan to retire at 65, you can typically expect to enjoy 20 or more years of retirement. No one wants to retire before they are ready, but if your finances are in order and you are anxious to make the move, it’s time to compare where you currently are with where you need to be to take your first steps toward a happy retirement.

For retirees to be, the first consideration is whether you have enough saved and invested to sustain your financial needs throughout your retired life. Not only do you need to have the basics covered, but you also want enough to live the lifestyle you choose and to do the things you have always wanted to. For greater peace of mind you can set aside funds to address unforeseen emergencies and unplanned cash needs which materialize all too frequently. The goal is to find a balance between working additional years to add to savings and getting started on your retirement journey as soon as possible.

Once you have enough money to retire, take a look at how prepared you are for the following:

What will you do? What you do to stay actively engaged will be a key component of the retirement happiness you experience. Before I roll into retirement I plan to compile a list of at least ten different activities and interests to keep me going during my second act. You may be able to get by with less or prefer more, but ten is a good starting point for me. The idea is to have a broad variety of interests to keep not just busy but actively involved and participating in each day. I believe it is important to choose activities that are dynamic and require you to think, calculate and stimulate your mind. Doing the same thing or following an identical daily routine may feel comfortable, but when you can basically run on auto-pilot there is not much challenge. My top five things to do in retirement are learning to speak French, improving my skills on the piano, continuing my blogging and writing efforts, becoming an expert at growing mouth-watering fruits and vegetables and what I call “historical travel,” where my wife and I thoroughly research the history, geography and culture of an area prior to embarking on a travel adventure.

Is your support network in place? As we age we will occasionally need help from those around us. Although many of us are proud of our independence and would prefer not to impose on others, we may need to at some point. When health and safety become a concern, a strong network of friends and family is of great value. We need others we can turn to not just in case of emergencies but also to assist in basic day to day functions. Having friends keep an eye out for our well being and offering the same in return is a good situation for all involved. Easy access to the nearest hospital and emergency care facilities is also an important consideration. An efficient public transportation system can be a blessing should driving become a challenge. As you prepare to retire, there may be specific areas in your support network that you need to beef up.

Will you retire in place or move? Living in the same home and neighborhood that you are already familiar with can be the perfect retirement for some people. Ideally the mortgage is paid off, you are friends with most of your neighbors and you know where all the best restaurants, stores and local attractions can be found. As long as you can safely maintain your independent living, retiring in place may be a high priority on your retirement checklist. For other people, retirement offers the opportunity to cash in on equity that has built over the years and move to some place new. Possible attractions include better weather, new surroundings to explore and new people to meet. A change in location can offer a fresh start and a new environment as you begin living your second act.

What insurance coverage do you need? As you age, one thing you can count on is increased expenditures for health care. More years lived means more things have the potential to go wrong. Health care coverage is a critical component of your retirement security. Don’t forget your teeth and eyes, which will likely need some attention along the way. Some people may want to consider long-term disability insurance to protect against what can be catastrophic expenses as the result of an extended illness. Those with estates may opt to help shield beneficiaries from inheritance taxes by purchasing life insurance in amounts that match expected fees to be incurred. With so many insurance options to consider, making the right choices for your individual situation is an important step in preparing to retire.

Do you have goals in retirement? Setting goals is not for everyone, but some people can benefit from a clear target to focus their efforts and energies. You may want to make preparations to leave behind a legacy for future generations or choose to contribute time and aid to worthy causes. Some people commit to improving their health now that they have time to dedicate to exercise and fitness. Setting a goal and measuring your success against its achievement can help to keep you on track and putting in extra effort to get it done.

From my blog for US News & World.

Why You Shouldn’t Delay Retirement

Do you really want to wait until you are 65 to enjoy the retirement life you have always wanted? Wouldn’t it be nice if you could leave behind the stressful working world and begin to live your second act earlier rather than later? Imagine getting up each day with nothing you have to do hanging over your head. Instead, you experience the luxury to choose what you will do or not do as the case may be. You could take a trip, write a book, enjoy a hobby you have always loved or do nothing as you revel in the peace and quiet of a life that you control. Why do we delay this magical time until age 65?

For most people, the big reason retirement cannot happen until later in life is strictly financial. If you decide you no longer want to work, you must have enough income generating investments and savings to subsidize your lifestyle. And with the economic volatility we have recently come to know, there is always risk. What may have been sufficient savings 10 years ago can change dramatically if we throw in a bit of political shenanigans, world conflict or another bursting financial bubble. It takes guts to exit the working world before society says you are supposed to.

Rules of thumb suggest that to live comfortably you will need 80 percent of your pre-retirement earnings or enough saved to allow you to comfortably withdraw 4 percent or less per year for the duration of your retirement years. But you might be able to get by on less. If the tradeoff is working more years at a job you dislike or reducing your standard of living a bit, some people choose to cut back their expenses. It’s easier to be frugal if it allows you to reach your target retirement date sooner.

I am 55, and the prospect of working another ten years until I am 65 seems like a long way down the road. I believe I have it in me to retire today and live a happy retired life from this day forward. I would like my retirement to include a mix of doing nothing with doing things that matter. I am learning to balance relaxation with an innate need to accomplish and achieve. I am coming to grips with the reality that I am no longer 20 and immortal. I am beginning to accept the realities of aging, although I plan to live an active second act. If my bank account was a bit more significant, I believe I could pull the trigger now. And I think I would like retirement just fine.

Am I ready to retire now before reaching age 65? I think I am. Do I have enough socked away to allow for the financial independence that is an important part of any fulfilling retirement? I don’t think I am there quite yet. Could I have done it differently along the way to have given myself a better chance at an earlier end date? That I will never know. But for those who still have time to make adjustments and save a bit more, the promise of beginning to live your second act before age 65 should serve as a worthy motivation.

From my blog on US News & World. Dave Bernard is the author of “I Want To Retire! Essential Considerations for the Retiree to Be“. Although not yet retired, he focuses on identifying and understanding the essential components of a fulfilling and meaningful retirement. He shares his discoveries and insights on his blog Retirement-Only The Beginning.