As my children conclude yet another school year this week, I am reminded of the weightless feeling I experienced at the end of each school year growing up. However, just as my excitement turned to boredom as a child, I expect my children to quickly become lost if they don’t have activities to structure their days.
To many, retirement can seem like an endless summer with countless possibilities and adventures. However, like my children, I’ve found that my retired clients are happiest when they have a plan for spending their newfound freedom.
To make sure you can lead a fulfilling retirement on your terms, here are some ways to prepare, whether retirement is imminent or many years away.
1. Come up with a plan for your leisure time.
Start thinking about how you would like to spend your leisure time long before you retire. Do you want to volunteer at the local food bank, learn a new hobby, increase your golf games or take up bridge? Research the activities you would like to pursue, and consider talking to friends who have already retired to see how they spend their time and what activities they find fulfilling.
2.Estimate how much your leisure activities will cost.
As I wrote about previously, entertainment activities and travel can be one of the most underestimated retirement expenses. If you plan on taking up a new hobby, such as painting or knitting, include costs in your retirement budget for equipment and/or classes you will need to take to adequately enjoy your hobby.
3. Practice living on your retirement budget.
Once you figure out how much you need in retirement, practice living on that amount for a few months to see if the amount estimated is realistic. This is particularly important if you anticipate certain expenses increasing, such as dining out with friends or trips to visit family.
4. Make adjustments.
The beauty of planning early is that if your retirement trial run isn’t a success, you will have plenty of time to make adjustments which could include:
- Working a few extra years to reduce the years you’re dependent on your retirement income.
- Downsizing into a smaller home.
- Increasing retirement contributions.
- Gaining part-time employment once you retire from a full-time job.
Your financial advisor can illustrate the impact each scenario will have on your future to guide you towards the decision that is best for you. At Legacy, our goal is for our clients to live a satisfying retirement. Set up a complimentary consultation to see how we can help you prepare.