4 Steps to a Stable Retirement
Filed under: Retirement
If you’re currently planning for retirement, you may be focused on reaching a certain goal for your retirement account. You should also be planning to pay off debts, or making decisions about when or where you want to retire.
But once you finally meet all of your milestones and stop working, you will stop planning for retirement and begin living it. But that doesn’t mean you’re finished! You should continue to reassess your financial strategy to make sure that your money lasts for the rest of your life.
As you shift from “saving for retirement” to “spending retirement savings”, follow these four steps to create a stable budget and lifestyle.
Set a budget. Once you enter retirement, it is likely that your budget will change. Analyze your expenses and designate a portion of your retirement income to your regular cost of living. But also remember that your circumstances will probably change over the years, so your spending should be flexible. Set aside some money in an easily accessible account for emergencies.
If you’re particularly worried about the transition into retirement, give your expected budget a test drive for about a year before you quit work. This will give you time to make any necessary adjustments to your spending habits.
Treat yourself – but wisely. After working and saving for decades, many new retirees want to make a major purchase to reward themselves. Just make sure to include this expense when you discuss your goals with a financial professional. That way, you can make a plan to accommodate your special treat without harming your budget for years to come.
Account for the cost of health care. Hopefully, you will enjoy good health for years to come. But it’s a fact of life that most of us will experience at least one major health crisis at some point during the retirement years. Not to mention, the cost of health care is rising every year. Since the future can be unpredictable, consider how a major expense would affect your budget. Be prepared to adjust your budget as your needs change, and consider purchasing long-term care insurance to cover the cost of a nursing home.
Continue to consult your financial professional. Just because you’ve reached the finish line for your career, it doesn’t mean you’re finished planning for your future. Make regular appointments with your financial professional, because needs and priorities do change. Your financial professional will continue to guide you as your financial ability and goals change throughout retirement.