THE DIFFERENCE BETWEEN PLANNING FOR RETIREMENT AND PLANNING FOR RETIREMENT LIFESTYLE

When you think of retiring, what comes to mind? Possibly the joys of doing things you’ve been too busy to do in your working years. You may think of traveling, or of spending tons of time with family and friends, or of developing relaxing new hobbies. Now, you have to be careful here. None of these things will just appear out of thin air; you have to responsibly plan for them to happen — just as you have to plan for the financial act of retirement itself.

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Many Americans get tripped up here. When planning out their retirement, they focus on the financial goals they need to achieve, but don’t necessarily think about how their day-to-day lifestyle in retirement will actually look. Now, you may counter, “What does it matter how I spend my days in retirement? What matters is that I have enough savings to retire in the first place.”

But financial experts highlight that in order to retire successfully, you have to do not only the financial planning, but the lifestyle planning, too. The two go hand in hand.

Ask Yourself, ‘What Am I Retiring To?’

When planning ahead for your lifestyle in retirement, you need to think less about what you’re leaving — a job/career — and more about when you’re entering into: a whole new way of being.

“What’s next?” said Gary Sirak, a retirement financial and lifestyle advisor and the author of “How to Retire and Not Die: The 3 P’s That Will Keep You Young.”

“For some it could be a life of leisure, seeing all the places they never had time to see while building a career,” he said. “For others, it could be a passion project — volunteering, helping others. Or maybe you have an idea for a new venture. But many times, people don’t know the answer to that question.”

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Create a Wish List for the Everyday Things

To help create a blueprint, if you will, for your lifestyle in retirement, create a wish list.

“What do you wish to be doing during the first day of your retirement? How about that first week, month and full year after you hang it up?” Sirak said. “Sure, you may know that you are going to take a big vacation and travel the world for a few weeks, but then what? Here’s where many soon-to-be retirees get stuck. It’s easy to plan for big trips, but the little, everyday activities can be harder to put on paper. Start there.”

Write Down Your Likes, Loves and Hates

You probably have a solid idea of all the things you hate or the people you can’t stand. Take some time to reflect on this and write it all down. It will help you in planning for your retirement lifestyle.

“Write out a list of all of the things, activities and even people that you like, love and hate,” Sirak said. “Then build it out to include how you can incorporate the things, people, places that you like and love, avoiding everything in the ‘hate’ category. Now you have a resource you can turn to when you find yourself twiddling your thumbs.”

Know How You Will Fund Your Hobbies

You may be looking forward to taking up new hobbies or pursuing longstanding ones once retired. Will these all be free activities? Likely not.

“There is a lot more free time in retirement that can lead to exploration of new activities; however, these interests can cost money,” said Kim Gattis, SVP and manager of financial planning at UMB Bank. “It is important to discuss with your financial team if you want to have funds available to invest in your hobbies, so they don’t become a bigger investment than you were prepared for.”

Consider That There Tend To Be Phases of Spending in Retirement

Another thing to consider when planning for your retirement, both in terms of finances and lifestyle, is that spending in your golden years often goes through phases that, according to Stephen Kates, CFP, principal financial analyst at RetireGuide and Annuity.org, may be summarized as “Go-Go”, “Slow-Go” and “No-Go.”

“Early retirement is marked by lots of activity and spending, sometimes more than prior to retirement as retirees splurge on travel and experiences while they have the opportunity,” Kates said. “Later in retirement, travel and other major activity slows after crossing a lot of items off the list but also as age begins to set in. Late in retirement, as people become older and health may worsen, retirement takes on more routine, and, unless there are significant health events, spending may actually reach its lowest level.”

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This article originally appeared on GOBankingRates.com: The Difference Between Planning for Retirement and Planning for Retirement Lifestyle

2024-06-30T11:03:38Z dg43tfdfdgfd