How to Retire Into the Lifestyle You've Dreamed Of
Perhaps you’ve been pondering retirement for a while now or maybe you have even started preparing for it. You've been picturing the days of unwinding with your feet up, holding a cool beverage on a sandy beach, in the mountain air or simply closer to your loved ones.
Maybe you’ve been working on saving while paying off your debt just to get ready. You've been working on your goals and figuring out your financial circumstances for the long-term future. So let’s talk about the steps it might take to transition from your family home into a more manageable living arrangement that's ideal for your retirement dreams.
Timing & Preparation
- Determine your time frame for retirement. How long should you work? Maybe you'll still continue to work part-time even after you semi-retire. Working a little longer, even just part-time, will allow you to earn more, save more and delay taking out your savings. There are even some studies that suggest it may be good for your mental health and memory to stay actively working, even if it's just a couple days a week. You might consider working somewhere where you can enjoy your hobbies such as a golf, which will allow you to make a part-time income while having fun participating in your favorite activity.
- Plan a detailed budget. Determine your expenses while allowing for inflation over time. This is especially important if you plan to stay out of the workforce permanently. A budget will keep you from overspending and having to start working again halfway through your retirement. If while you're creating your budget you determine you won’t be able to live how you wish to live, what will your backup plan be?
- Calculate how much you will need in savings to survive and enjoy the best years of your life. Then decide how you will earn your income or when and how you will withdraw from your savings and investment portfolios (without penalty). Determine which accounts you will withdraw from first — typically you want to withdraw from taxable accounts first so your tax-deferred accounts can keep growing.
Due Diligence
- Be sure to check your benefit and payout options from your current job before you say goodbye to employment!
- Research your Social Security benefits and determine the age in which you would like to collect these benefits. You can get a reduced rate for collecting at an earlier age or wait and get your full rate.
- Decide what to do with your home if you own one. Do you have equity in your home and do you plan on selling the house? Perhaps you have your home paid off and will continue to stay as long as you can. If it's not already paid off, it's good to consider your time frame for retirement and how that might impact your need to sell your home in the future to access its equity.
- Eliminate your debts. Part of enjoying your retirement freedom is getting all of your other debts paid off — don’t ruin your retirement fun with debt hanging over your head. Work now on a plan to try to eliminate it or reduce it so you have peace of mind when retired.
- Have an emergency fund. Just like the piggy bank you may have had when you were younger, why not save while you're in your retirement phase? If possible, go for an interest-bearing savings account or speak with your banker to evaluate the best options so your saved money earns a little more while it awaits your needs.
- Consider your healthcare needs. How will you pay for your healthcare costs? Try to anticipate your needs throughout your retirement and determine the best time to transition from your current healthcare plan into your retirement benefits. Look into supplemental coverage until you qualify for Medicare or Medicaid.
- Research resources available to help you smoothly transition into retirement. Look into things like support and social groups in the community where you plan to live.
Desired Lifestyle & Location
- Define your lifestyle. Will you continue to work part-time? Is traveling in your retirement future? Are you interested in a location that has activities and amenities or do you need more care?
- Is socialization important to you? Be sure to evaluate the opportunities for social events, networking and meeting others with similar interests to yours.
- What location will you want to live in? Will you want to live around family and friends, or on the beach away from it all?
- Spend some time finding a Realtor® who specializes in working with your specific requirements as you face decisions in buying, selling relocating or refinancing. Find a Realtor® that holds the Seniors Real Estate Specialist® (SRES®) designation for the best chance of getting your home needs met during this sometimes-stressful situation.
- Determine what living situation would be best for you. Do you need a home with very little maintenance? Fewer responsibilities? Full medical care?
- Maybe you'll want to start by downsizing — check out Nestiny's Guide to Downsizing Done Right for tips on less-stress downsizing!
- Renting an apartment could be a good interim step before moving to a retirement community if you're not quite ready for that or are waiting for a spot on the community's waiting list to become available.
Retirement Communities
If thinking about a Retirement Community, do a little research about which types might be best suited for you:
- Active Adult Age Restricted Communities: Suitable for age 55+ adults with active lifestyles. Homes typically include no maintenance living with a country club setting including a golf course, clubhouse, trails, hobbies, recreational spaces, tennis courts, pool, etc. This type of community is typically not for those with ongoing health concerns and at least one person in the household must be 55+ with no one under age 19.
- Independent Living: Includes services such as outings, housekeeping, transportation, cooking and dining options, etc. You will enjoy the benefit of no exterior home maintenance as well as 24-hour security and emergency services.
- Assisted Living: Offers staffed daily care for personalized support and assistance with medication, routines, supervision, meals, activities, housekeeping, rehabilitation services, exercise plans and more.
- Memory & Alzheimer’s Care: Provides trained staff dedicated to supporting individuals with memory loss, dementia and cognitive impairment to ensure comfort and safety.
- Long-Term Nursing Home Care: Licensed, government-regulated and funded homes with constant care. These facilities assist individuals who need 24-hour nursing care with private or shared rooms.
- In-home Private Care: Provides the ability for you to stay in your current home and enjoy the assistance of a nurse or housekeeper who can help maintain the cleanliness of your home, run errands or cook meals for you.
- Adult Daycare: Offers flexibility to loved ones who may be helping to take care of you but still are working during the day.
- Government Programs for Short-term Respite Care: Potentially offered in your area and worth doing some research if you think you may qualify.
If you're seeing the retirement lifestyle in your near future, it's best to weigh all your options before you rush into things. Plan ahead and take the crucial steps necessary to go from the workplace to the next phase of your life. Take your time and properly research all of your retirement options to make sure you are doing what’s right for you and your life goals.
You may end up opting for full or semi-retirement. Visit different retirement communities, take tours, meet staff and residents. Imagine your furniture in different locations, investigate the activities, amenities, menus, commutes and more. You may even be able to arrange a guest stay to experience the place firsthand before packing up and moving.
Many who ease into retirement find that the simplicity that goes along with this new lifestyle is just what they needed. They make new friends and go on adventures every single day. Planning ahead reduces stress and uncertainty, making the transition into the best years of your life seamless. It never hurts to be prepared. What are you waiting for? Start planning for your retirement today!
Want more advice about all things home — including homebuying or selling advice? Nestiny is a great place for homebuyer education and to help you gauge how ready you are to buy a home. Journey Homeward allows you to enter all your wants and needs while the True Affordability Tool will break down your budget, showing what you can comfortably afford. You will also receive a Ready Report that will give you a vital head start in the home buying journey, saving you valuable time and money.
