If you are within 5 years of retirement, you are in the “red” zone. Small actions such as reviewing your investments and/or updating your financial plan can have a significant outcome because of how close you are from going from saving to spending.
Retirement Solutions works with women who are within 5 years of retirement as well as those in retirement. For this article we are focusing on those women who are quickly approaching retirement.
Actions to Take:
- Know your expenses: There is no need to make this task into an all-day affair. Most people are not fond of putting to paper, how much they spend. We understand that, however if you do not know where you are going, any road will take you there. We suggest that you look at your annual spending (assuming you know that) and divide that number by 12. You now know how much you spend per month.
- Have a health care plan: Many expenses shift when you retire. You spend less on clothing and more on travel. What may come as a surprise is how much more you will spend on health related costs. The earlier you retire, the more you need to budget for healthcare as you have a longer period of time to cover before you become eligible for Medicare (age 65).
- Do the home repairs now: If you have put off renovating your kitchen, re-roof the house or paint the house, do it before you retire. One reason that retirees spend so much in the early years of retirement is because they have deferred such tasks while they were busy working thinking “I will do it when I have more time.” The problem with this scenario is that it places a greater strain on your budget and assets just as you are no longer earning an income.
- Travel now: When I talk to retirees in their late 70s, the number one regret is, “We did not do what we wanted to do when we were healthy.” Don’t fall into the trap of waiting to live your life until after you retire. If you have your health, take a trip, now.
- Create a model week: This is a very important exercise. When you retire, you lose three very important aspects of your life: identity, relationships and structure. Draw out each day with three sections: morning, afternoon and evening. Fill in those areas with what you currently do. Next, fill out the areas with what you ideally would like to do. The more blank spaces that you have, the more time you need to commit to this exercise. We are big believers in having a purpose in life and therefore at Retirement Solutions we have the exercises to assist you in modeling an ideal life while in retirement. Let us know if we can assist.
This is a very brief introduction to the subject of pre-retirement planning. Retirement Solutions is engaged in a form of financial planning known as financial life planning which helps you identify your core values as a person and then helps you use your money in concert with your values. We find that when that is accomplished, our clients lead happier, more fulfilling retirements.
Let us know if we can be of assistance by contacting us. There will be no pressure put on you. You talk and we listen.