Planning for retirement is more than just saving and investing money. There are so many other elements to consider as well—Some of which may not be on your radar. In a recent episode of Talking Benefits from the International Foundation of Employee Benefit Plans, host Stacy Van Alstyne interviewed our own benefits “nerdthusiast” Julie Stich about her experience as a recent retiree.
Preparation Is Key
Even for experts, the retirement preparation process isn’t easy! Thankfully, Julie was armed with the knowledge of what things she needed to get in place before her official retirement to set herself up for a smooth transition and long-term comfort. Due to the benefits offered by the International Foundation, Julie had a pension plan, a 401(k) plan and good health care coverage. She also contributed to an IRA and an emergency savings account to prepare for unexpected expenses down the road.
To financially prepare for her next chapter, Julie cleared any outstanding debts (congrats on the early condo mortgage payoff!), bought and paid off a new car, and did some larger home maintenance projects to get bigger expenses out of the way before her retirement. She also began working with a trusted financial advisor to aid her with this transition and offer guidance on concerns, such as retirement budgeting and when to claim Social Security.
As you consider your own retirement, utilize the resources at your disposal to determine how financially prepared you are for this next step.
Ready for What Comes Next
Once you have financially prepared for retirement, it is then time to consider the big question: What comes next? What will life look like now that you have an extra forty free hours in your week? Thinking about your postretirement life can help you develop a realistic budget and get you excited for your next chapter. Consider the following areas to address.
Housing
A home is more than just the roof over your head. Retirement housing is a critical decision tied to one’s income, expenses, health and medical care, and social life. Julie is electing to stay where she is, but she is considering vacations and potential snowbirding opportunities.
Health Care
Everyone’s health is different, and we all require different levels of care. Think about what coverage you will need—health, dental, vision, and/or hearing. As you approach age 65, you will need to consider Medicare and supplemental coverage. Health care can be a major retirement expense, and one way to keep costs down is by taking good care of your personal health. Julie sees her primary care physician annually and gets regular vaccinations and preventive screenings when recommended. One goal for her retirement is to improve her relationship with exercise and healthy eating—But one thing she won’t change is her daily Diet Coke.
Mental Well-Being
One element of retirement life that often gets overlooked is mental health, which is linked to social outlets and leisure activities. Work takes up a lot of time; how do you replace that time during retirement? This is what makes Julie excited. She is looking forward to having more time for herself and less stress, planning to spend plenty of time with loved ones, and catching up on reading books and watching movies. Julie also expects to travel, with ten U.S. states and eight Canadian provinces left to visit. To keep her mind sharp and stay active with her hobbies of art and history, Julie aims to join the National Archives Citizen Archivist Program, where she can volunteer to transcribe historical documents in her free time.
Julie said it best: “We all have things we dream of doing; make sure to keep that in mind when you’re thinking about retirement.”
Long-Term Care and Estate Planning
Along with retirement comes the responsibility to plan for the eventual end of the line. You’ll want to have an up-to-date will and testament and health care and financial powers of attorney in place. Julie plans to gather important information and documentation in a next of kin box. Consider preplanning long-term care and funeral arrangements to alleviate stress and financial burden down the road.
Lean on Trusted Resources
Retirement necessitates thoughtful planning and support. Lean on others in your life who may be going through the same process and seek trusted, updated resources for guidance. The International Foundation has a variety of resources, including Financial Education/Retirement Security toolkits for both the U.S. and Canada, as well as the 49th edition of Ready or Not: Your Retirement Planning Guide. Julie found the checklists in this book helpful and highlighted the sections on finance, health and activity as particularly valuable when thinking about her own retirement.
Want to learn more from this practical retirement discussion? Tune in to the full episode of Talking Benefits wherever you find podcasts—It’s a fun one.
