What Questions Should You Ask Yourself Before Retiring?

 

Planning for retirement can be an exciting time as the culmination of your life’s work fully comes to fruition. Kevin Canterbury of Arizona acknowledges, at his company, advisors frequently help future retirees with managing their retirement plan. Naturally, the first step in a retirement income plan is to envision what your life will look like in retirement. Here, Kevin Canterbury provides a list of some of the most important questions to ask yourself before making the decision to retire.

What Will I Do?

In retirement, what you plan to do with your time is important for your financial plan because it will determine how much income you will need. For evaluating, it helps to consider your activities in terms of both income and expense. For example, expense generating activities such as travel, hobbies, or entertainment can quickly add up and should be accounted for in your retirement budget. Some people that enjoy working choose income-generating activities that help them afford some of their more expensive fun. Whatever you plan to do with your time in retirement, it is important to be honest regarding what you plan to do on a day-to-day basis. These factors will influence how much money you have to play around with.

Where Will I Live?

Kevin Canterbury notes that where you want to live is an important factor in your retirement financial plan because these costs tend to be some of the highest. Individuals that plan to retire will want to consider factors such as affordability, proximity to family, and closeness to business opportunities. For example, retiring individuals that plan to travel may save by choosing inexpensive living options or downsizing their current housing. Individuals that have health concerns may want to choose to live in proximity to family or friends. According to Kevin Canterbury, Arizona contains a growing retired population- many of whom are in the middle of making important decisions regarding their living situations in their golden years. Evaluating one’s options and situation to make the best decision is one piece of advice Kevin would offer these individuals.

How Long Do I Expect to Live in Retirement?

While it may sound morbid at first, considering how long you expect to live in retirement is crucial for establishing a retirement plan. A safe option is to plan for retirement income to last until 95 or 100, but there is no firm rule for an individual’s true life expectancy.  Some people that are close to retirement age may realize that they love their job and do not want to retire at the time. This similarly can impact how long a person wishes to live in retirement. If you are close to retirement and are worried that you may leave too much on the table, life expectancy calculators can be an excellent way to get an accurate idea of your life expectancy.

How Do I Want to Live?

Similar to how it is important to know what you want to do with your time, it is also a good idea to plan for how you want to live. Some people want to enjoy the simple life in their retirement and are okay with reducing expenses and living frugally. Others see retirement as the opportunity to live their lives to the fullest, unbound by the responsibilities of working. Kevin Canterbury of Arizona recognizes that there is no right or wrong way to enjoy retirement. What is important is that people are honest about what type of luxuries they may want in retirement and craft a financial plan that accounts for the life they wish to live.

Am I Prepared for Emergencies?

Planning for everything you can prior to retirement is a great way to set yourself up for success, but it can be difficult to plan for unexpected events as you move through life. As we age, our health can be a wild card in terms of retirement planning. Ironically, healthy retirees are more likely to need long-term care later in life that is not covered by Medicare. There are other potential emergencies that can arise in retirement such as a family member needing assistance, economy crashes, or costly natural disasters. It may not be possible to plan for every potential scenario, but it can only help to have an established emergency fund and gameplan in retirement.