We spend most of our adult lives planning for retirement. However, there are those that don't plan—or don't plan enough—for what to do once they actually get there. A recently posted pennlive.com article has some great ideas about what to do when we retire.
The article, “5 steps for a successful retirement,” gives us some things to think about.
- Retire to something. The first work day after you retire, you're going to wake up and have an entire day to fill. You’ll need to decide what you're going to do with your time so that you can enjoy your golden years. You might volunteer or work part-time, but do it because it's something you enjoy. Perhaps you want to take a class and learn something new or do some traveling. Often we think about retiring from something, but it's more important to retire to something.
- Plan a budget and keep to it. A major adjustment for retirees is the lack of a regular paycheck. Yes, there may be Social Security benefits and a pension, but many of us will need to rely on savings. Chances are you will need to create an income stream out of your retirement assets. Calculate a reasonable amount to withdraw from your portfolio annually without jeopardizing your financial future and then divide that number by 12 to get a monthly figure. Don’t withdraw money on an as-needed basis because you might drain your account too quickly.
- Don't forget about inflation. You need your portfolio to grow enough to outpace inflation. The only way to do that is to continue to invest in some stocks. Your portfolio should continue to trend upward until around age 80. If it peaks before then, you could run out of money.
- Keep track of medical needs. A major cost in retirement may be your medical care. If you retire prior to eligibility for Medicare, you need to plan how you're going to pay for medical insurance. And even if you have Medicare, it doesn’t cover everything. Investigate some supplemental coverage and don't forget about long-term care costs that may occur later in life.
- Update your estate planning documents. You should update your will, power of attorney, healthcare directive, and other estate planning documents after any big life event. Guess what? Retirement is a big life event. As you get older, you get closer to a time when you will need these documents. Make sure you've reviewed them and that they're up-to-date to fit your current needs. If you don't already have all these documents in place, talk to an experienced estate planning attorney and get things going.
Reference: pennlive.com (November 15, 2015) “5 steps for a successful retirement”