RECAP: Smart Choice #1
- Review your expenses and create a realistic spending plan.
- Gather all current insurance policies and create a quick one-page summary.
- Pull together all investment statements and summarize balances and account type.
At this point, you pretty much have all the information in place to seek out a financial planner. What can they do? In our practice, we create a comprehensive financial plan for our clients that includes a discussion of retirement, investments, insurance, and estate planning. By completing projections for you, we can help you determine if you are on the right path. Are you saving enough? Are your investments going to do their job and provide you with the income you need during retirement? Does it look like you might need to adjust your living expenses to have a successful retirement? We can help you answer all these questions.
Smart Choice #2 might come into play when you first meet with a financial planner, so start thinking about it now (and start discussing it with your spouse or partner as well): What does retirement look like?
- Does retirement for you start at 62, 65, 67? What about for your spouse or partner?
- Will you work in retirement? Volunteer? Travel?
- Does retirement mean aging in place? Downsizing your home? Retiring abroad? Moving to be close to your children? Moving to an independent living facility?
How to get started?
Pull out some paper and make a list of these questions and give one to your spouse or partner. Both of you should answer the questions as honestly and with as much detail as possible. If you want to keep it light and fun, you can always do a vision board. Some people think this is silly, but I’m a visual person. I like to dream of how things can be in the future, and visioning helps me create goals. It’s very telling to compare your lists or vision boards when finished. If you saw mine, it would likely include a small house or condo as a primary landing space, but lots of world travel. If I asked my husband to create one, it would include lots of acreage, a tractor, and farm animals. So, there will be some compromising in our future ahead. Just realize that if you never ask the questions, you will never know the answers or how to plan accordingly.
Some questions may seem quite minor before retirement, but take on more significance during retirement. For example, I encourage clients with partners or spouses of similar age to retire at the same time if possible. Retiring more than a few months to a year apart can create resentment and derail retirement plans. One partner might have it in mind to spend winters in a warmer location. That doesn’t necessarily work if your spouse or partner is employed full-time or even part-time.
Another important consideration: where will you live in retirement?
Answering this fully requires both financial and quality of life conversations. If you plan to age in place (staying in your current home), you should consider what renovations will be needed to make it possible. Wider doorways, grab bars in showers, entries with few or no steps will all be important to age in place. Will you downsize your home? Are you and your spouse or partner going to be fine leaving the family memories behind to have a home that is more maintenance friendly?
What does retiring abroad look like? There is a growing desire for many people to retire abroad from a financial perspective. People choose locations where expat communities are fully functional and the cost for living is lower than here in the U.S. Also, some folks embrace a different culture and often warmer weather in these locations. It’s very important to do your research if you decide to relocate to another country. Will you have access to good healthcare? Will you pay income taxes here and there?
Finally, there are many considerations to make when moving to a Continuing Care Retirement Community (CCRC). We could spend pages just writing about the ins and outs of CCRCs. If you are interested in going this route, we recommend you schedule visits with each facility. They will provide you with all of the details of the options and costs of the facility. Important to note – monthly expenses, level of care, and significant entrance fees. Sit down again with your pad and paper and create the pros and cons of each facility. If you have plans to transition to a community facility within five or six years, you’ll need to get on waiting lists now.
Stay tuned to the next part of this Smart Choices for Retirement Series, #3.
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Any opinions are those of Jennifer Adams and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.