Life After Retirement: 6 Tips To Prepare for Retirement

Zoe Team

Jul 1, 2020

5 min read

A financial advisor reviewing a plan with two clients at a table

Key Takeaways

Start your retirement transition planning early to mitigate financial and emotional stress.
Clearly define your post-retirement lifestyle goals to ensure your savings align with your desired activities.
Regularly review and adjust your retirement strategy to account for inflation, healthcare costs, and changing family needs.

Frequently Asked Questions

When should I start preparing for retirement?

It is best to start as early as possible to allow your savings to grow and to give yourself time to adapt to changing circumstances.

How do I manage retirement stress?

Focus on creating a clear, actionable plan that covers your essential expenses and reserves funds for the hobbies you enjoy.

How has retirement planning changed?

The modern retirement landscape involves longer life expectancies and evolving pension structures, requiring more proactive and adaptive strategies.

Planning for life after retirement can come with some bittersweet feelings. Over the last decade, the retirement landscape has changed, making retiring even more overwhelming and planning for it more challenging. Follow our six simple tips to make life after retirement feel more like a smooth transition and less of an emotional whirlwind.

1. Start Planning for your Dream Retirement

According to Prudential’s 2018 Retirement Preparedness Survey, the biggest goals amongst retirees and pre-retirees include relaxation, family time, leisure activities, starting a business, volunteering, going back to school, and travel. Traveling the world is a common retirement dream shared among 70% of American workers. Yet with only 25% of Americans feeling financially prepared for retirement, it’s become increasingly important to know what life after retirement might look like for you.

2. Be Smart and Plan Smart

Concerning finances, workers are now increasingly having to save for their retirement funds with less predictable incomes, as fewer individuals are eligible for pensions. You might think that once you have retired, you no longer need financial goals, but they’re just as important as when you were planning for retirement.

You have to plan and have a strategy for your money that ensures your happiness and health. Focus on making sure your savings are allocated smartly for your desired lifestyle. A financial planner can help you design this strategy considering both your short-term and long-term goals.

3. Understand Your Social Security Benefits

Did you know that the age you’re entitled to your Social Security benefits varies depending on when you were born? It’s called your Full Retirement Age. If you were born between 1943 and 1954, this will be when you turn 66. It gradually increases between 1955 and 1959. While for those born in 1960 or later, it’s 67 years of age. Once you reach your full retirement age, you can access 100% of your retirement benefits. Your retirement benefits are calculated as an average of your monthly earnings over the 35 years in which you earned the most.

You can start claiming benefits at 62, but earlier claims reduce the amount you can claim overtime. Similarly, you can also wait past your Full Retirement Age up to 70, which will earn you credits that will boost your benefits once you claim them. Your benefit increases 8% a year between full retirement age and 70. When you decide to start claiming depends entirely on your circumstances and what you want your retirement to look like. To best decide when to start claiming benefits, make sure to consult your financial advisor to ensure it fits into your holistic financial plan.

4. Focus on Your Health

Taking care of your health should be a top priority as in your life post-retirement. This means both staying as healthy as possible and having a solid healthcare plan, as healthcare costs tend to increase during retirement. You can stay fit in several ways, like walking or running for example. You should also stay up to date on your vaccinations, flu shots, and doctor check-ups to be on top of your health.

According to a recent HSA Bank survey, Healthcare expenses are often underestimated by retirees. In 2019, a couple of retiring age needed around $285,000 for medical expenses throughout their retirement. But these expenses should not have to take up most of your savings! This is why setting up a health savings account (HSA) while planning for life after retirement is a good idea. Some HSA plans offer triple tax advantages which will help you have a safety net for all things medical during retirement. A financial advisor can help you navigate the best potential savings accounts for life post-retirement.

5. Prioritize Your Needs and Wants

Your life doesn’t stop after retirement, that’s why it’s so important to prioritize your needs and your wants. Having a financial advisor will help you make key decisions when it comes to adjusting your lifestyle to the life you want to live. Central to this must be what you want to do and where you want to do it.

Are you looking to downsize, relocate, stay put, or go travel? You must take into account all of these options, in addition to medical costs and potential social security benefits when it comes to allocating your retirement funds. Every choice you make will involve a different strategy. Make sure any large purchases for new homes or relocation fall in line with your overall budget and financial plan you’ve discussed with your advisor

What most people are going for when they retire is to achieve a cost-effective lifestyle that does not sacrifice comfort. This is why you should be looking at where your money will go. According to the Employee Benefit Research Institute, people 65 to 74 spend 45% of their retiree budget on home-related expenses. You might want to establish a monthly budget (if you haven’t already) that also projects over a full year so you can contemplate quarterly, semiannual, and annual expenses. Setting goals, executing an action plan, and reviewing it regularly with the keen eye of your financial advisor will keep your finances solid.

Many people typically downside to reduce costs during life after retirement. This might mean moving to a smaller home to suit your new lifestyle, or relocating domestically or abroad. Consider this an excellent opportunity to get rid of belongings that are no longer necessary for your lifestyle. As Marie Kondo recommends, it is about rethinking whether something brings you joy. Similarly, you might reconsider your entertainment options. Is it worth paying Netflix or Hulu if you will be escaping to an exotic locale post-retirement?

6. Don’t Be Scared, Be Excited!

Altogether, life after retirement should be an exciting time filled with new opportunities. It is much more than simply ceasing to work and takes careful financial planning. You now have all of the financial independence to decide how you want to live as you age, whether that is sailing around the world, starting a new business, or spending time with your grandchildren. The choice is yours!

1. Start Planning for your Dream Retirement

2. Be Smart and Plan Smart

3. Understand Your Social Security Benefits

4. Focus on Your Health

5. Prioritize Your Needs and Wants

6. Don’t Be Scared, Be Excited!

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