Part of the retirement planning process is realistically imagining what you want your life to look like. Bear in mind that you’re really only planning for the first chapter of retirement — the one where you travel, pursue hobbies and spend more time with family and friends.

If you have a partner, it’s important to recognize that you may have different goals. For example, a wife may want to travel more frequently to see family, whereas a husband is thankful he no longer has to commute to work every day and would rather enjoy reading and watching television. Some folks find they slip into bad habits after a few months into retirement — sleeping late, watching too much TV, not exercising or getting out of the house to see people. It may be worth considering some type of volunteer opportunity or part-time job to give your days more structure.1 Earning extra cash is not a bad idea, either.

The second stage of retirement is when people start to slow down and don’t get out as much, so they don’t spend as much money as they did before. Then there’s the final stage — when you need more money than ever to pay for things like large health care expenditures and help with assisted living.2

As you can see, developing a retirement plan is more complex than just accumulating money and then spending it throughout time. Consider positioning your assets so that you have multiple sources of reliable income. You may want to consider ways to maximize your assets in case you or your spouse lives to a very old age. If you’d like to discuss various insurance options for your retirement plan, please contact us.

One source of retirement income that most Americans enjoy is Social Security, which is guaranteed to continue until you pass away. However, even this government-sponsored benefit is under duress. There’s been a focus in recent months on legislation for infrastructure bills and ways to economically rebuild the U.S. back to pre-pandemic levels. In addition, retirees just received their biggest cost-of-living increase in Social Security benefits in years. The problem is that neither Congress nor retirees (and approaching retirees) are actively lobbying to fix the current Social Security program. If Congress doesn’t come up with a supplement plan, retirees will see a reduction of about 22% of their current benefits beginning in 2034.3

Another facet of retirement planning is having a contingency plan for when things don’t pan out quite the way you thought. For example, make sure your beneficiaries are up to date on all of your accounts, that they have the information necessary to access those accounts and contact information for your financial advisor or estate attorney, and consider buying long-term care insurance.4

1 Paul Schoenfeld. Herald Net. Feb. 20, 2022. “What are your plans for reaching retirement?” https://www.heraldnet.com/life/what-are-your-plans-for-reaching-retirement/. Accessed Feb. 21, 2022.

2 Dan Hunt. Morgan Stanley. Jan. 11, 2022. “What kind of retiree do you want to be?” https://www.morganstanley.com/articles/retirement-life-spending. Accessed Feb. 21, 2022.

3 Trina Paul. CNBC. Feb. 10, 2022. “Will Social Security run out of money? Here’s what could happen to your benefits if Congress doesn’t act.” https://www.cnbc.com/select/will-social-security-run-out-heres-what-you-need-to-know/. Accessed Feb. 21, 2022.

4 Ameriprise. 2022. “Unexpected events.” https://www.ameriprise.com/financial-goals-priorities/retirement/preparing-for-unexpected-life-events. Accessed Feb. 21, 2022.