The Retirement Plan
New Surroundings

The Retirement Plan: 5 Tips to Consider

I went kicking and screaming. My husband’s employer, Procter & Gamble, strongly encouraged their employees, as they approached 50 years of age, to attend a two day retirement planning seminar. I was in my early 40’s and the thought of taking two days off work to think about retirement was anathema. But he wore me down and I very reluctantly attended. It turned out to be perhaps the best investment of two days I’ve ever made. No less, the moderator, Chuck, was entertaining and made it fun!

Now that we are post-retirement from P&G and on to new, ‘second half’ careers, I appreciate all the things the seminar prompted us to think about in preparation for our life today.

Here are five learnings for you to think about as you build your own retirement plan:

1. Finances

Couple Talking to Financial AdvisorThis is the first thing most of us think of when contemplating retirement – is my financial house in order? Can I afford to retire?

The advice we were given was to find a certified financial planner who can develop a fee-based financial plan for the retirement years. In other words, pay someone who is totally independent of selling any financial instruments and who will do the financial analysis necessary to create a multi-year (over your life expectancy) plan of income and expenditures so you will know if you can afford to retire, and if so, will know approximately what you can spend each year.

You will pay several hundred if not thousands of dollars for this type of plan, depending on the complexity of your investments and income, but it is well worth the objectivity and peace of mind you will have to get an honest assessment of your financial situation.

2. Estate Planning

This type of planning entails what you might think of as ‘end of life’ issues but because we never know our end date, it is critical, especially for your heirs, to have this thought through and documented. Documents such as wills, trusts, durable power of attorney, medical power of attorney, directive to physicians, funeral plans, etc. should be included in an estate plan.

None of us particularly likes thinking about when we are gone but it is one of the best gifts you can give your kids or heirs to have these issues well defined so they don’t have to guess or wonder what you want.

3. Family

Each family is different and needs to find its own rhythm in retirement. Some want to live close to their kids to spend significant time, even daily or weekly, with their grandkids. Others may be fine with visits throughout the year. There is no right or wrong approach but it is important to think about what you and your family want so that you can build your desires into your retirement plan.

4. Location

Couple Sitting on DockWhere do you want to spend the rest of your life? Staying where you raised your kids and likely where many friends are? Or moving where you can pursue your hobbies such as golf or sailing? Or where the weather is good most of the time?

The trend is clearly for retirees so move south, to Florida, Arizona and increasingly to Texas, but where you settle depends very much on how you will spend your time and what type of environment will make you feel comfortable.

5. Time

What will you do with yourself when you retire? This was one of the big eye-openers for me … that you should proactively think about how you will spend your time in retirement. Here are the most prevalent categories:

  • Work – continuing to work in the same field or something totally new and different from your career
  • Volunteering – donating your time supporting the community
  • Hobbies – anything from active sports like golf or tennis to mental stimulation like playing bridge or other games to art-related activities like painting or wood working
  • Family – with kids or grandkids or families of origin and their offspring

As people live longer, many retirees now find that they need to spend the most time taking care of aging parents which is a new, time consuming reality.

Figuring out what to do with yourself may be the most critical action item of the five. We have all heard of people who retire, only to feel totally useless and de-valued, and succumb to an early heart attack or other demise.

The key point to the retirement seminar I was loathe to attend was to give as much or more time and thought to proactively planning your retirement years as you did earlier in life planning your career, as uncomfortable as some of the topics might be.

My husband and I followed these recommendations and now, a dozen years after his official retirement, we could not be happier with our decisions.

Good luck with yours!

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