Keen On Retirement™

We've been talking a lot lately about how the cost of living and inflation can erode your purchasing power throughout retirement. But there’s another subset of costs that we plan for separately: health care. Our planning projects health care costs to grow about 6% a year, compared with 3% for other living expenses. Your retirement plan needs to anticipate not just higher drug prices and Medicare premiums, but also rising health care needs as you age. And if you or your spouse eventually needs long-term care that Medicare doesn’t cover, the out-of-pocket costs can easily run you tens of thousands of dollars every year. Wealthy seniors have two long-term care tools at their disposal: their nest eggs and the ability to pay for long-term care insurance. You can start clarifying your best options by working through this four-step checklist:

If there's one thing that successful people are good at it's ... continuing to succeed! You've done well because you've always kept your eye on the next target, whether it's a bigger promotion, a more comfortable house, or more money to save and invest for your family's future. In financial services, we often call these prime working years the "accumulation phase." High achievers who want more from life go get it. They work hard, top off accounts, and diversify their assets until ... Well, until what? Until you've hit your number? Until the kids have moved out and you and your spouse can focus on retirement? Until you're financially independent and don't need to work anymore? Affluent folks who don't think about what their money is for often find themselves stuck in the accumulation phase far longer than they need to be. So, if you already have a million or two or more waiting for retirement, it might be time to stop earning "more" money and start doing more with the money you already have.

Every day in retirement presents a new set of choices. After all, once you don't need to work, you're in charge! A full day at the golf course? Absolutely. A spontaneous weekend getaway with your spouse? Why not? Grabbing coffee with friends, or sitting at a table solo to enjoy a good book? It's up to you. And if you don't like how today turns out, you can always make different choices tomorrow. However, there are some choices in retirement that don't come with easy do-overs. And the less reversible a decision is, the more important it is to think through all of your options and make the right choice the first time. Let's look at where some key retirement decisions fall on the reversibility spectrum.

What's on your bucket list for retirement? Globe-trotting vacations? Long afternoons on the golf course or in your fishing boat? Relocating to a beachfront condo or a cozy cabin in the woods? That vision can motivate years of saving and planning. But the retirement you enjoy may look different from the one you first imagined. A good financial plan doesn't lock you into one version of retirement. It gives you room to adjust as your life changes. As I've discussed throughout this six-part blog series on The Adaptable Retirement, you don't need to predict exactly what will make you happy in retirement. You need a plan that helps you evaluate and support changing priorities.

In financial planning, we sometimes refer to your working years as the "accumulation years." A large part of your time is spent working and earning so that you can support your family, achieve milestones like buying a house, and secure your financial future. But during those years, you're "accumulating" more than money. You're gaining relationships, hobbies, interests, skills, experiences, memories, and, yes, possessions. By the time you reach retirement, your life is probably as full as it's ever been. Too full, maybe. As you move through the various stages of retirement, your identity is going to change along with your interests and priorities. And part of change is letting go so that you can make room for new people and new experiences that are going to make every step of your journey more fulfilling.

A recurring theme in my series of blogs about The Adaptable Retirement is that your financial plan has to account for a constant that seniors often overlook. Change. As you near the end of your career, I doubt that you have the exact same goals, relationships, and interests that you had when you started working, or when you and your spouse first met. What you do every day has changed. Who you do those things with has changed. How you spend time when you are and aren't working has changed. Your body and health have changed. Your understanding of the world and other people has changed. In many ways, you’re a different person with a different identity. And this continual process of growth and renewal doesn't stop when you stop working.