For many people approaching retirement age, there may be trepidation about how to properly plan for your retirement lifestyle. Unfortunately, without having a trusted advisor along for the ride, the journey toward retirement can feel a lot like planning a trip to the moon without an engineer. There are many unknown aspects about what will happen once you actually retire. How will your new-found freedom affect your spending habits? What will be the state of the economy at that point in time? Will you stay where you are, or travel, or permanently relocate?
Hire an Advisor
A good first step to successful retirement lifestyle planning is to find a financial advisor that can help to answer questions you have about how your investments can work for you as you approach retirement and beyond. As your employment situation changes, your income will fluctuate and the tax laws regarding your income will also likely change. A knowledgeable advisor will be able to tell you which changes will directly impact you based on your current situation, in conjunction with your CPA, can help formulate a plan to take advantage of the best tax breaks and plan investments accordingly.
A good advisor should be able to help you to take both a micro and macro perspective on your retirement. This means looking at how you will conduct your daily life, as well as how your overall expenses will be changing. Good retirement lifestyle planning should allow you to set goals, and account for things that you've always wanted to do, but never been able to because of work commitments as well as prepare for unexpected events.
Small Scale Planning
As a retiree, you may find you have extra free time with too few hobbies to fill your days. Will you take up boating, or sign up for classes at the community center? Because of these new hobbies, new retirees may see some increase in recreational spending. After all, nobody wants to retire just to sit at home alone all day. Planning for retirement is planning for a great adventure, and you may want to allow for an increase in discretionary spending, even if only for a little while until you adjust to your new routine.
Large Scale Planning
In the grand scheme, this is also the time to plan for big moves and traveling expenses. If you want to take a two month vacation to Europe, you will need to plan accordingly above and beyond the normal budget you plan to live on. You should also consider the expenses if you choose to relocate in this new chapter of life. Will you keep your tired old minivan or will you finally jump for that shiny new sports car? All of these things should be taken into consideration when looking at the bigger picture of your retirement lifestyle planning.
In addition, a trusted advisor should have a good understanding of market trends, and the state of the economy. They should be available to help you plan a trajectory and assist you in creating a well-balanced investment portfolio based on your needs.
Conclusion
Before you sit down with an advisor, let yourself daydream about what the perfect retirement would look like. That way, when you sit down to plan the next step of your journey, you will have clear goals in mind and they will be able to design personalized retirement lifestyle planning. Consider both your short-term and long-term plans and goals, and give yourself plenty of room to expand your horizons.
To speak with a Wealth Manager about your own personal situation, contact us at WrapManager. Call 1-800-541-7774 or contact us here to talk about running through various scenarios and creating a plan that will help you achieve your own personal retirement goals.
