Your Retirement Plan is Most Effective When You Know Your Aspirations
When you think about your retirement plan, you might be focusing solely on your financials. While critically important, of course, money matters are not the only plans you need to have in place in order to enjoy the retirement of your dreams. In fact, clarifying your dreams, goals, and aspirations for your retirement phase of life are crucial elements in developing the strategic roadmap that will help you achieve a secure and meaningful future. To help you sharpen your vision for what lies ahead, below we will discuss three retirement lifestyle questions to ask yourself so that you can better plan – financially and otherwise – for life after work.
Question #1. What are your motivations?
Sure, you’re saving for retirement just like everyone else is, but if you’ve been doing so robotically just because that’s what you’re supposed to do, then these retirement lifestyle questions can help you gain more direction. As you approach retirement, take some time to reflect on why you’ve been saving money. Set aside any societal beliefs about what you’re supposed to do and reflect on your personal intentions for your nest egg. Are you looking to establish security? Are you planning to spend this money, or are you hoping to live off of the interest and leave a legacy for future generations? Knowing your intentions for saving will help guide you when it comes time to make decisions about how to spend your money in retirement.
For instance, say you run an income analysis that shows you’ll have $1,500 more than you need each month. What should you do with those extra funds? You could choose to spend it on travel or other leisure pursuits. You could put it toward a hobby you’re passionate about. You could also use it to bolster your emergency fund to protect yourself from unexpected expenses. There will always be many options for how you manage your money, so thinking about why you saved in the first place will help you better determine how you want to use those funds in your retirement.
Question #2. Do you hope to leave a financial legacy for your family?
Some retirement lifestyle questions, like this one, may bring up many emotions. The lifestyle you choose after retirement may very well be informed by a strong desire to leave something behind for your loved ones when you pass on. If you think back to the previous question, maybe you want to save your extra money so that you can pass it on once you’re gone. If that’s the case, then you’ll need to figure out the best way to do so, whether that’s through buying life insurance, utilizing a Roth conversion strategy, funding a trust, or utilizing another estate planning technique that works best for your situation and goals.
You may also experience a range of emotions if you plan to enjoy your wealth, rather than passing it on to your heirs. This is a very personal decision, and there is no right or wrong approach to living the retirement of your dreams.
Question #3. What is your long-term care plan?
Nearly 70% of Americans will require long-term care at some point, so this is an integral addition to any list of retirement lifestyle questions. Long-term care can be quite expensive, and the cost is only expected to rise. If you wait until after you retire to create a plan for how you’ll pay for long-term care, then you could end up paying even more money. Or worse, you may find that you’re unable to afford it at all and that you must rely on family members to help support you. Again, if you go back to the previous example where you have $1,500 extra dollars a month to spend, how comfortable do you feel spending that on doing something fun if you have no real protections in place for covering long-term care costs?
Ultimately, when it comes to long-term care, you receive the level of care that you pay for. So, while it may not seem necessary to have a plan in place for care you may never need, planning ahead is smart if you want to be sure all your needs are met.
Ask Yourself These Retirement Lifestyle Questions to Bring Your Future into Focus
All retirees’ goals are unique to their personal circumstances and passions, so whether your goal is to spend or preserve your money in retirement – or a balance of the two – having a confident retirement requires a well-conceived plan. This won’t be possible until you have a clear vision of what you want to accomplish in your retirement years and how you envision your lifestyle for this phase of life. Being intentional about asking yourself these questions and taking time to reflect on your retirement goals will help make building your retirement plan that much easier.
At Arbor Capital, we approach retirement planning through a comprehensive lens so that we can help each client develop a retirement plan that supports their financial and lifestyle goals. If you would like to speak with one of our professionals about your retirement plan, please reach out today to schedule a conversation. We are committed to helping you see your vision through!