Preparing for retirement is not entirely financial.
Your degree of happiness in your "second act" may depend on some factors that don't come with an obvious price tag.
Here are some non-monetary factors to consider as you prepare for your retirement.
What will you do with your time?
Too many people retire without any idea of what their retirement will look like. They leave work, and they cannot figure out what to do with themselves, so they grow restless.
It's important to identify what you want your retirement to look like and what you see yourself doing. Maybe you love your career and can't imagine not working during your retirement. There's no hard and fast rule to your dream retirement, so it's important to be honest with yourself.
A recent Employee Benefit Research Institute retirement confidence survey shows that 72% of workers expect to work for pay in retirement, whereas just 30% of retirees report that they've actually worked for pay. Having a clear vision for your retirement may help you align your financial goals. It's important to remember that your vision for retirement may change—like deciding you don't want to continue working after all.
Where will you live?
This is another factor in retirement happiness.
If you can surround yourself with family members and friends whose company you enjoy, in a community where you can maintain old friendships and meet new people with similar interests or life experience, that may be a plus. If all this can occur in a walkable community with good mass transit and senior services, all the better.
How are you preparing to get around in your eighties and nineties?
The actuaries at Social Security project that the average life expectancy for men turning 65 is 84.1 years old, and the life expectancy for women turning 65 is 86.6 years. Some will live longer. Say you find yourself in that group. What kind of car would you want to drive at 85 or 90? At what age would you cease driving? Lastly, if you do stop driving, who would you count on to help you go where you want to go and get out in the world?
How will you keep up your home?
At 45, you can tackle that bathroom remodel or backyard upgrade yourself. At 75, you will probably outsource projects of that sort, whether or not you stay in your current home. You may want to move out of a single-family home and into a townhome or condo for retirement. Regardless of the size of your retirement residence, you should expect to fund minor or major repairs, and you may need to find reliable and affordable sources for gardening or landscaping.
These are the non-financial retirement questions that no pre-retiree should dismiss. Think about them as you prepare and invest for the future.
Sources:
1. Employee Benefit Research Institute, 2021; 2. Social Security Administration, 2021
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.
The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Published for the blog on June 28, 2022 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.
