Are you ready to retire? If you’re like most people, you just yelled “YES!”, and now you’re fantasizing about packing up your desk and booking cruise tickets. However, emotional readiness is just one piece of the puzzle. As your expected retirement date approaches, make sure you can answer these four questions to your satisfaction.
How is your risk tolerance? Throughout your working years, you might have selected a few riskier fund options due to their potential for faster growth. But as you near your expected retirement date, you will probably want to switch to a more conservative approach in order to protect your principal. Schedule an appointment with us, so that we can evaluate the future of your investment strategy under these new conditions.
What is your withdrawal strategy? We focus so much on saving for retirement, that many of us forget to create a withdrawal strategy. Have you assessed your true cost of living in retirement? Have you planned distributions in such a way that your income tax burden is minimized? What about the cost of medical care and the possibility of long-term care in the future? Most people don’t simply set regular withdrawal amounts. Instead, withdrawals must be strategically planned from one year to the next, in order to reap the best results.
Have you made an estate plan? You probably chose beneficiaries, years ago, when you first enrolled in a life insurance policy or opened your Thrift Savings Account. Typically, much can change over the years, so take the time to evaluate those choices before you retire. It’s time to meet with an estate planning attorney, too, to establish a Will and any other necessary legal documents.
What will you do all day? It might seem silly to wonder what you will do all day after you retire. After all, you can’t wait to get away from the office! But in reality, the happiest retirees are those who have a plan to spend their retirement years. Take some time to ponder options such as volunteer work, travel, part-time employment, community activities, and so on. Having a plan for your daily activities will keep you socially engaged and give you a sense of purpose.
These are just four questions that everyone should ask themselves before retiring. You might also face additional dilemmas specific to your situation. So give us a call, and we’ll sit down to discuss your retirement plans and create a plan for success.
