Retirement Planning Guide for Seniors

Written by: Daniel Gleich

For many, retirement is something to look forward to after years of employment. People often see it as a new chapter in their lives and a time to enjoy the freedom that comes from permanently leaving their job. As exciting as it may be, though, it can also be frightening. Before entering retirement, one should give it careful thought and create a plan that will help ensure that it’s an enjoyable experience.

To start, people should figure out what their retirement goals are. Having a goal can help determine what one’s ideal retirement lifestyle looks like. Goals can help people see a bigger picture regarding what they want to experience or accomplish during this stage of life. Seniors whose goal is to see more of the world, for example, may ultimately choose a lifestyle of travel. Another person’s goal may be to pursue a passion and start their own business or live a more quiet, leisurely life away from busy cities.

Where a person lives after retiring plays a big role in their lifestyle. A retired individual or couple may want to move closer to family, to a new state, or even to a different country altogether. Family homes may feel too large or empty for retired couples, and seniors may find living in a smaller home less expensive and less work in terms of upkeep. But for others, particularly those who have paid off their mortgages, moving may not even be a factor.

One’s health is a big consideration if contemplating a move during (retirement). People in good health may look to active adult communities as an option. Unlike other neighborhoods, these communities include houses, apartments, and condos that are only for active people over a certain age. Another option retirees may consider are independent living communities that offer services such as food, housekeeping, and even transportation.

Deciding on a lifestyle, however, is just one step. People will also need to determine if they’ll have enough income to live the life that they want and to reach their post-retirement goals. To start, they’ll need to estimate what their income will be. Things to consider include Social Security benefits, 401(k)s, IRAs, and any other savings plans that may be in place. People should also look at how their annual or monthly expenses, such as gas or other daily transportation costs, will decrease after retirement. New and increased expenses are another factor to consider; for example, an employer will no longer pay for health insurance premiums.

Once an estimated income is set, the next step is to estimate how much one will spend on housing, food, and other general expenses. People should also keep in mind that unexpected events and expenses may arise that take a toll on one’s finances. Experts recommend setting aside enough to cover a minimum of three months’ worth of expenses.

At this point, one should know whether their income will be enough to cover their retirement expenses and allow them to live the life they want. If the results aren’t favorable, it may be necessary to look for additional sources of income or make adjustments to one’s plan.

Learn the best way to make the right retirement choices with these resources: