Many aspects of retirement planning are based upon actuarial charts and life expectancy calculators that tell you how long the average person lives. It’s difficult to plan for a phase of your life based on an assumption that may or may not actualize. Even if the statistics were correct, they don’t take into account the chances of something unforeseen happening that may alter original projections. Retirement planning assumes a degree of uncertainty. That being said, the more concrete you can create your retirement vision, the more detailed plans you can create for it.
Three factors to take into consideration when planning your retirement lifestyle are:
Be realistic in your choice of lifestyle
While it is true that retirement brings more free time, take an objective look at yourself before sitting down to write your list of the things you want to accomplish. Health, finances, family obligations, and other possible constraints on your lifestyle should be taken into consideration. Being realistic about what you want to accomplish will help you avoid the frustration associated with planning a lifestyle that is impossible to achieve.
The sad truth about expenses
Too many people plan their retirement lifestyle budgets expecting their expenses to decrease. It might be true that downsizing from a large house to smaller, less expensive, living accommodations will save money, but what about other living expenses? The home repairs you were able to do on your own might require a contractor as your ability to do certain tasks becomes limited by the aging process.
Even if you are in good health as you approach or enter retirement, a serious illness could significantly add to your expenses. Factor into your budget the flexibility to meet unknown expenses.
Get professional advice
Financial planners know the perils that come from unrealistic or ill-planned lifestyles. Discuss your lifestyle choices with your financial planner to make certain that your budget and retirement fund are up to the task of meeting your needs. A certified financial planner can’t magically make money appear where there wasn’t enough before, but he can help you manage your expectations. Call the office to see if we can help you 02-624-2788.
Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published October 22, 2014. Updated May 2023