3 Essential Steps for Retirement Planning

Everyone does retirement their own way, depending on how long you’ve worked, how long you plan to work, and what your goals are for after you’ve waved goodbye to the daily grind. No matter your career or lifestyle, essential steps for retirement planning are consistent across the board and keeping these in mind with help from a financial expert will make the next phase of your life comfortable and flush.

1. Identify All Expenses

What do you have to pay for weekly, monthly, and annually? Consider all discretionary and non-discretionary expenses so you can afford what you need and what you want, including the following must-haves:

  • Home maintenance: Whether you live in a single-family home, condo, retirement community, or have multiple homes, you will have mortgage/rent, taxes, utilities, and upkeep.
  • Vehicles: If you’re fortunate enough to have a paid-off vehicle, it still requires fuel and maintenance. Ideally, your retirement is long enough that you will eventually need to buy a new vehicle and will then be responsible for payments.
  • Health: Health insurance will no longer be part of employment benefits so private pay will be necessary. Health problems could arise that demand significant costs as well.
  • Food: Weekly grocery trips need to be budgeted and maintained.
  • Leisure: From dining out to entertainment, travel to gifts, you deserve to have a good time in retirement whatever your hobbies or pursuits and the goal is to be able to afford it all.

2. Dream Big

It’s your right to have big dreams and hopes for retirement. You may be heading into the future solo or with a partner, with children and grandchildren. Determine how everyone and everything that’s important to you fits into the equation so you can enjoy a full and joyful retirement.

  • Do you want to buy a second home?
  • Are you planning to downsize and travel?
  • Does your child need financing for higher education?
  • Are you contributing to a grandchild’s education?
  • Do you want to make extensive charitable contributions?

It’s always better to overestimate the costs of your post-work lifestyle, so you always have more than you need instead of not enough. A financial planner will guide you in all your pursuits and what’s viable, especially taking inflation and emergencies into consideration.

3. Talk Retirement Activities

Your financial advisor will best be able to help you when you are up front about all your plans post-retirement, including ones that collect income. Many retirees choose to be a consultant, get a part-time job, or invest to keep themselves busy and to keep some money coming in. The questions you’ll have to answer are – how long will you do these activities and how will they affect your overall finances? Will you use that income immediately or invest?

Most importantly, you and your financial advisor will identify multiple sources of retirement income – from your nest egg to investments to growth-focused assets – to determine a budget, identify expenses, and minimize tax consequences.

Retirement planning is essential, whether you’re months or years away from this milestone. Planning now helps make money management later easier. Schedule a consultation with a retirement planning specialist and financial expert at Hollander Lone Maxbauer to get your future in order.