Retirement can be an exciting new chapter — a time to redefine who you are, explore new interests and create a life that’s uniquely your own. After years of focusing on work and career goals, this stage offers a chance to shift gears and craft a lifestyle that reflects your true priorities and passions. To set yourself up for a successful transition, it can help to start by considering five key questions:
- Who will you be?
- What will you do?
- When will you do it?
- Where will you do it?
- How will you pay for it?
While financial planning (how you’ll pay for it) is crucial, the other four questions ultimately shape your budget and savings needs. For example, if your dream is to have a vineyard in Tuscany, that’s a much different scenario than staying close to home and planting a small garden. Thinking carefully and realistically about each question can help you create a retirement plan that aligns with your goals and lifestyle.
Who Will You Be?
During your working years, playing endless rounds of golf might sound like a great way to spend your retirement. But retirees often find that, beyond relaxation, they crave purpose and meaningful activities. Knowing who you want to be in retirement — whether it’s the world’s best grandparent, a devoted volunteer or a seasonal winemaker in Italy — will help shape your financial plan. Each vision of retirement comes with its own costs, and understanding these lifestyle expenses is key to building a budget that supports the future you want to create.
What Will You Do?
Think specifically about how you’ll fill your days. Some people are eager to leave the work-a-day world behind completely, while others might prefer — or need — to continue doing some type of paid activity. Consider whether you might want to ease out of full-time work with a phased retirement by gradually reducing your hours over time. Phased retirement can not only keep you engaged, but also provide an extra income stream while allowing you to adapt to a new pace of life.
If you’re considering volunteer work, think about how it might affect your finances. While many volunteer opportunities are unpaid, there may still be associated costs — such as transportation, training or travel — that you should factor into your budget.
When Will You Do It?
The timing of your retirement can significantly impact your financial future, particularly when it comes to Social Security benefits. Deciding when to claim Social Security is one of the most crucial choices you’ll make, as it can affect your monthly benefit amount for the rest of your life. If you begin taking benefits earlier, your monthly payments will be reduced, but you may receive them for a longer period. Waiting until your full retirement age, or even delaying after that, can result in a substantially higher monthly benefit. Ultimately, the right timing depends on your unique circumstances, such as your health, longevity and overall retirement savings.
Where Will You Do It?
Location is a crucial piece of retirement planning that affects everything from daily living costs to long-term financial needs. Do you want to be close to family? Stay in the community you live in now? Move abroad? Buy an RV or literally sail off into the sunset? Each option has unique costs — including housing, taxes and health care — that will shape your financial plan. By carefully evaluating where you’ll live, you can budget more effectively and ensure your finances align with the lifestyle you envision.
How Will You Pay For It?
With a vision for what you want to do and where you’ll do it, the next step is determining how you’ll fund it all. It can be helpful to sit down with a Financial Professional to map out a personal timeline and set goals, like making catch-up contributions to your retirement plan. They can help you align your vision and budget with your available resources.
While not every journey has to follow a road map, you’re more likely to reach your destination — a long and happy retirement — with one. With thoughtful planning and preparation, you can help ensure your retirement dream becomes a sustainable reality.