Many of retirement decisions are uncomfortable because they involve changing aspects of one’s life that may have been routine for years or facing the prospect of one’s deterioration in health or death.
Downsize. Owning a big home requires numerous financial expenditures including higher property taxes, insurance coverage, upkeep costs and more. There is also the mental stress that comes with the upkeep of your home.
Practical solutions to housing for retirees should focus on the financial cost, safety, mental health, physical limitations and being around people on whom you can rely. The sooner you make the decision to downsize, the more trouble you can save yourself in the future.
Investments. Determine a proper asset allocation, an appropriate withdrawal strategy and coordinate various income streams. Talk to an estate planning attorney and financial advisor to see which ones will work best for your retirement.
Estate Plan. It’s critical to have an updated estate plan as you get older, accumulate more wealth and need to plan for the transition of that money to the next generation.
The main documents for a proper estate plan include a will, power of attorney for finances, power of attorney for health and a health care directive. Work with an experienced estate planning attorney.
Long-Term Care. A person turning 65 today has a 70% chance of needing some type of long-term care services in their lifetime. As we continue to live longer, this care will be a reality for many people.
Activities. Very few people have a strategy for how they will spend their time in retirement. You may want to work part-time, volunteer and to have regularly scheduled visits with family and friends. These activities help provide daily structure, social interaction and intellectual stimulation, which are all essential for preventing rapid physical and mental decline.
Don’t procrastinate! Start thinking about these issues today.
Reference: Forbes (Aug. 3, 2020) “5 Crucial Planning Steps To Take Before You Retire”