Your lifestyle will largely dictate the financial “success” of your retirement. Which is true before retirement as well. If you spend more than you make, you will struggle financially.
In a recent blog post, I wrote about how you need to plan for what lifestyle you will have in retirement. It’s important to take a snapshot of your expenses now, so we have a target to aim for in the future.
Hard numbers are necessary for retirement planning.
Because then we can say, “if you spend this, you’ll need that amount of income”. Actual information creates real world implications. Otherwise the decisions are too nebulous.
But writing that post left me thinking about the task retirees face and the daunting feeling of needing to have your retirement all pre-planned out.
Retirement is one of life’s biggest transitions. And going through transitions is stressful. Even if you hate your job, you still have the familiarity of routine. Even if you don’t find the work fulfilling, you still feel productive, you still feel like you’re contributing.
Sure, some people day dream about the gardening, golf, grandkids or volunteer opportunities they are immediately going to devote themselves to upon leaving the work force. And they can’t wait for that day to come.
These are the happy folks you see in the TV commercials. A woman doing beach yoga, or an older couple painting a house wearing matching overalls. And the message is THAT THIS IS WHAT WE PLAN FOR.
Yes, we want to build a plan that allows you to spend your money on the things that matter most. But we also want to build in some wiggle room in case you realize that the grass wasn’t greener and you want to change course.
We’re planning for the happy moments, but we’re also planning for the moments when you don’t know what to do next.
You don’t have to have everything figured out before heading into retirement. In fact, you probably won’t.
You are allowed time to figure out how it is you want to spend your time.
That’s what we plan actually plan for!
The home improvement projects will dry up, the grandkids will make you cranky, the golf will probably get boring and you’ll be on to the next thing. And I hate to break it to ya, but you will almost certainly wonder about the financial implications of doing so.
What retirement planning is really all about is being able to talk through all of this stuff. It’s about having that sounding board to bounce ideas and concerns off of, so you’re not left second guessing yourself. Or worse, feeling like you’re pigeonholed into living how you currently are.
You do have to know your financial limits. You can’t spend exorbitant amounts of money trying new hobbies and living new places until something sticks. You have to know your upper range of spending. And you have to know what going over that amount does to the viability of your future financial situation.
A “successful retirement” means different things to different people. Part of why retirement planning ahead of time is so important is because you start to get a feel for what a “successful retirement” might mean for YOU.
What a lot of industry folks mean when they say “retirement success” is that you don’t run out of money at the end of your life. But what if you want to get as close as possible? What if you don’t want to create a legacy? Is it better to leave money behind or drain your accounts while you still can?
These are the things we have to aim for. But how you get there is up to you!
We know that things will change over the course of a retirement. And we don’t want anyone to feel like they are locked into anything because “this is not what we planned for”. We build plans with flexibility in mind. That’s why we believe wholeheartedly that financial planning is an ongoing process and not a one time event.