Good planning for retirement boosts the likelihood that you'll have a successful, happy retirement period. This isn't just a general rule of thumb. Specific planning steps will help you in different ways during the three common stages of retirement. What are these? And how can you leverage planning to avoid typical problems during them? Here's what you should know.
1. The Honeymoon Stage
When a person first retires, they often go through a joyous honeymoon-like period of freedom and leisure. While this stage offers a lot of joy, it can be marred if you retire early and fail to plan for health insurance expenses. Those who want to retire before becoming eligible for Medicare should research alternatives such as spousal insurance, COBRA, and working for benefits.
You'll also be at your most healthy and energetic during this time. This often means travel, fixing up your home, spending time with grandchildren, or volunteering. Budget for extra costs associated with these activities so you can do them as you want without fear of burning through your budget.
2. The Disillusionment Stage
After a few years of enjoying your newfound freedom, the reality of retirement often begins to set in. Americans spend so much time hyping up their retirement goals that they may feel let down by its practicalities. Some get bored. Some worry about money. And others may feel a lack of purpose. How can planning help you in this stage?
Creating a side income during your working years helps alleviate boredom, lack of purpose, and fear of actually using your retirement funds. Cultivate a side gig, purchase some rental property, turn a hobby into a small business, or work with a local charitable group. And be practical about retirement planning rather than overly relying on optimism and wishful thinking. The result will better match what you envisioned.
3. The Stability Stage
After passing through a rough period of disenchantment, retirees generally find their footing and gain new perspectives on their retirement. You'll usually learn to enjoy this new chapter of life for what it is, worrying less about the past or the future.
Help yourself reach the point of stability earlier by setting up a lifetime retirement income, such as by buying an annuity or finding an employer that offers pensions. You may also experience more health problems, so additional funds for later-life health expenses is a smart investment.
Where to Start
Want help with these or other targeted planning needs? A little extra work and assistance from retirement advisors will help you meet these stages of retirement happy, healthy, and financially stable. Make an appointment today.