Don’t leave your retirement to chance
People spend more time planning for a vacation or buying a car than they do for retirement, says Jeanne Fisher, a certified financial planner with ARGI in Bowling Green, Ky. “Retirees are about to have significantly more free time than they’ve had the last 40 years,” she says. “They need to plan for the lifestyle changes as much as they plan financially.”
Others agree. “It's not always how much you have, it's more important to know how much you can spend,” says Larry Stein, president of Disciplined Investment Management in Deerfield, Ill. “Ideally, you want to align your spending with what you enjoy.”
What else to consider? Unexpected expenses. “Some years you will have big expenses such as new roofs, new cars and other life expenses,” says Lynn Ballou, a certified financial planner with EP Wealth Advisors in Lafayette, Calif. “Be ready and have the liquidity to cope without needing to sell investment assets in a down market.”
Preserve your dignity
A. Scott Ward, a certified financial planner with Johnson + Sterling in Birmingham, Ala., says it’s vital that older Americans preserve their dignity throughout retirement, which, for some, could last for more than three decades.
One way to do that? If you’re thinking about whether to start your Social Security benefit early, say age 62, Ward suggests considering how long you might need the benefit for yourself — and how your decision affects your loved ones who might survive you.
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Think about the surviving spouse
Thinking about your household and not just yourself is vital. Consider: Females reaching age 65 have an average life expectancy of an additional 20.6 years while males have an average life expectancy of 18 years, according to the Administration for Community Living. What’s more, almost half of older women (45%) age 75 and over lived alone.
“Unfortunately, many women have had very little involvement in their family finances,” Fisher says. “Women nearing retirement should be engaged with their finances and work closely with their spouse and a certified financial planner so that they are prepared to handle their personal finances if the need arises.”
Plan for health care costs
According to the Administration for Community Living, the need for caregiving increases with age. For instance, the percentage of older adults age 85 and over needing help with personal care was 22% in 2017, more than twice the 9% level for adults aged 75 to 84 and more than six times the 3% level for adults ages 65 to 74.
“Retirees should be cognizant of how (demographic trends) will affect health care and long-term care costs and plan accordingly,” Fisher says.
For his part, Stein urges you to be smart about your health. “We all know the right things to do — eat healthy, exercise regularly, get enough sleep, manage stress — but not all of us live that way,” he says.
Stein says the two biggest risks most retirees face are financial and health. “And they're equally critical to having a comfortable retirement,” he says. “One without the other can make retirement very challenging. Make sure you have a way to pay for long-term care, whether it's through insurance or your own funds — this is one of the biggest risks you face to having a comfortable retirement.”
Have a Plan B for your sources of income in retirement
While many American workers say they want to work at least part time during their retirement, Ward says less than 20% over the age of 65 are actually working at this time. “This places a premium on working ‘the plan’ now — from contributing to a workplace retirement plan to making sure you have appropriate investment choices for your goals — and having a backup plan if your paycheck retires before you do,” he says.
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Check your financial plan for leaks
Whether you are still working or retired now, regularly checking your budget and investments for “leaks” can add value to your plan over time, Ward says. Look for areas in your budget where you could save some additional dollars each month. Evaluate the fees you are paying for investments. “Are there any investment choices in your workplace retirement plan that can help you achieve your financial goals at a lower cost?” Ward asks. “Keeping your thumb on investment costs can help you keep more of your potential earnings.”
Make sure your legacy documents are current and in order
Ward recommends checking whether your beneficiary designations for your IRA, Roth IRA or workplace retirement account are still accurate. Also, check whether you have an updated will, an advance medical directive and a durable power of attorney. “Having all of your legacy documents buttoned up can provide comfort and peace of mind,” Ward says.
Enjoy retirement
Old age is a time to enjoy the ordinary and the exceptional. “Whatever your passion, whether it's travel, time with loved ones, sports, volunteering or even just socializing with friends, enjoying retirement is about having time to do what is fun and/or meaningful to you,” Stein says. “Having all three — financial comfort, reasonable health and enjoyment — is the recipe for a comfortable and enjoyable retirement.”
Give gifts of love and money
Consider, too, creating special videos for family members. “I would love to hear and see my parents again — we did not have movie cameras that recorded sound — and our pictures are all hard print — rather than digital,” says Neal Van Zutphen, a certified financial planner and president of Intrinsic Wealth Counsel in Tempe, Ariz. Also, calculate how much you can give “with warm hands and heart” and still afford to do what you want to do and avoid being a burden to your children, Van Zutphen says.
Robert Powell is the editor of TheStreet’s Retirement Daily www.retirement.thestreet.com and contributes regularly to USA TODAY. Got questions about money? Email Bob at rpowell@allthingsretirement.com. The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.
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