Exactly how will your lifestyle and financial needs change when you reach retirement? And what can you do to prepare today? Guest writer Mark Snyder has a few suggestions.
A 2012 study by the Center for Retirement Research indicates that only 48 percent of households are ready for retirement by age 65. Proper preparation for retirement involves reinventing yourself and your notions of retirement. Financial security is important, but finding satisfaction and peace of mind are critical components of retirement as well. Remaining in the workforce, maintaining your health and wellness, re-assessing your financial portfolio, understanding your needs in older age, and redefining success are all ways to reinvent yourself in retirement.
Remain in the Workforce
While some people think retirement means no longer having to work, many people find that continuing to work provides them with a sense of purpose. Working part-time is a great way to keep a source of income while engaging yourself mentally. The Experience Life blog suggests that you consider career downshifting, part-time work, or self-employment for extra income. Options for work include starting a low-risk business related to a hobby or revisiting the career idea that you have always entertained. For people with abilities in a given field, consulting can offer satisfaction without the demands of a full-time career.
Maintain Your Health and Wellness
Just as continuing to work will keep your mind active, physical activity can support your health and wellness. Physical activity such as walking reduces your risk of developing chronic health conditions. Eating a well-balanced diet can prevent high blood pressure and high cholesterol. Get a routine checkup at least twice a year to catch any early signs of illness or disease. The other benefit to maintaining your health and wellness is a decreased financial burden from healthcare expenses. Once you cut your risk for getting sick, you can spend less time and money at the doctor's office. Plus, diet and exercise can improve your mood and help you focus on reinventing yourself in retirement.
Re-assess Your Financial Portfolio
Retirement is all about financial security. Your portfolio likely has a mixture of investments to produce a return that supports your lifestyle, but there are ways to cut unnecessary expenses in your portfolio to make yourself more secure. As indicated in this video about the pros and cons of variable annuities, most people choose variable annuities because of their popularity and the bonus credit. However, the popularity and bonus credit are not reasons to choose variable annuities because of the high administrative fees and rider costs associated with this investment. Changes like these to your financial portfolio could improve the returns on your investments. Talk to your financial planner for more information.
Understand Your Needs in Older Age
Reinventing yourself in retirement means educating yourself about how your needs will change as you get older. Leaving your job is only a part of what changes in retirement. Your job may have offered benefits that include health insurance, life insurance, and disability. Once you leave your employer, these costs become your responsibility. After the age of 65, you're no longer eligible for disability insurance. However, life insurance and health insurance remain. You'll need life and health insurance coverage if you need care in a home or facility. Preparing for these costs can save you from out-of-pocket expenses and further improve your financial security.
While working, you defined your retirement success by judging if you've saved enough money. Now that you're no longer working, you need to redefine retirement success. You already have financial security, so what else will make you happy? Give yourself goals to work toward in retirement, such as taking the vacation that you delayed before or learning a new language. Continually setting goals to reach new successes will keep you happy and mentally sharp.
Reinventing yourself in retirement is all about preparing yourself for your new lifestyle. Continuing to work, maintaining your health and wellness, re-assessing your financial portfolio, understanding your needs in older age, and redefining success are all steps that can help change old notions about retirement and better prepare yourself. What are some other ways you are looking to reinvent yourself in retirement?