Nina Lloyd is a Certified Financial Planner® and Chartered Financial Planning Counselor®. She is managing advisor of the Triangle office of Opus Financial Advisors.
Ever wonder how to take your retirement years from good to great? You can’t skimp on planning, saving, or diversifying. In addition to traditional retirement strategies, below you’ll find a few common practices we’ve found that significantly enhance lifestyle through the decades.
50’s: Trim the fat and cut the cord.
After the kids move out and you’re comfortable in your quiet, comfortable home—challenge yourself to shake things up a bit. Consider downsizing now—when you can, not when you have to. Moving is never easy (or fun), but it is increasingly difficult after you (or your spouse) blow a knee or develop shoulder problems. Downsizing also decreases the amount you spend each month (lower mortgage payment, lower electricity bill, etc.), and you may net a nice profit from the sale of your larger home. The earlier you decrease expenses, the more you’ll have to spend later on.
Next, be sure your kids become financially independent (aka: go ahead and cut them off). If you don’t, in a few years you may find a 30-year-old living in your basement complaining that you never keep good food in the house.
What should you do with that extra money? Consider Long Term Care Insurance and IRA Contribution Catch Ups.
60’s: Make BIG choices.
You can see the finish line. You are so close you can taste it (or is that just the garlic you ate last night?). It’s time to make some big choices. When do you want to retire? This isn’t a theoretical question any more.
It’s specific. Next year? 18 months? Name your date. If you enjoy working, don’t be afraid to keep at it—consider simply reducing your hours. Each year you refrain from tapping into your nest egg will add to your bottom line, increasing potential earnings and the longevity of your funds.
Name your place. Do you want to relocate post-retirement closer to the kids, the beach, or the golf course? Should you consider a retirement community? Start making the arrangements. Test drive a few “top spots” when you are vacationing.
You’ll also want to consider Long Term Care Insurance in your early 60’s (if you haven’t already). Talk to your planner and/or insurance agent as soon as possible.
As individuals approach/enter their 70’s, they become much more difficult (and expensive) to insure. With great healthcare and technology, people are living longer—and care certainly isn’t getting less expensive. We regularly hear stories about families that are drowning due to the cost of care for their parents. Rather than becoming a burden on your kids, find a way to pay for good care (with sponge baths given by a little eye candy).
70’s: Communicate TOUGH choices.
Retirement + Grandkids = Golden Years. Life is good. But, don’t overlook the need to have important conversations about death. One of the best gifts you can give your children or heirs is a smooth transition.
Hold annual family meetings where you discuss the state of the union (i.e. any health or financial changes). Review all you have, all you owe, how you wish to be treated if/when you get sick, and what you would like to happen after you die.
Bring copies of important documents like your Advanced Health Care Directive, Last Will and Testament, and contact information for your financial professionals (CPA, planner, insurance agent, and attorney). Consider allowing your planner to serve as a facilitator during the family meetings. Will your conversation be a little uncomfortable? Maybe. But the pain, fear, and confusion that can come from lack of clarity is far worse.