By Sue Stevens
When you get to within five-to-ten years of when you expect to retire, the planning usually gets more serious. So far, you’ve probably thought about how much money to save every year, but now you need to think about lots of other issues that will guide you to a better estimate of how much you need to accumulate.
What Are You Retiring To?
What is it that you want to do? Have time to read? Work out regularly? Spend more time with kids, family, friends? Take up a new hobby? Volunteer your time for something you care about? Take a class? Try working at something new? Perhaps with fewer hours or a shorter commute.
Whatever the possibilities, you should probably talk to your spouse (if you’re married) to see how that fits in with their future plans. It’s quite common for the spouse to have some anxiety about a change in the daily home routine. No doubt compromise will need to be part of everyone’s agenda.
- Make a list of what excites you about the future and how you’d like to spend your time.
- Think about how much those possibilities will cost.
- Talk to your spouse, friends, other people you trust to get their thoughts.
Your choice of where to live is a major factor to consider when contemplating retirement. Are you happy staying where you are? Do you want a warmer (or colder) climate? Do you want to be able to travel for extended periods? It’s all about lifestyle.
If you are happy living where you’ve always lived, you probably won’t have many surprises. But if you’re thinking about a second home in another part of the country or perhaps moving permanently somewhere else, you need to do some homework. Try spending a longer vacation where you think you want to go. How will you make new friends, find medical care or get involved with your community?
- If you plan to stay where you live now, quantify the costs for living there. Is your mortgage paid off? Do you have association fees? Can you afford to pay property taxes once retired? Should you consider downsizing within the same area?
- If you are considering a new location in retirement, make the time to visit for several weeks or months. The experience will help you consider issues you may not have thought about before. What are the costs like? Higher? Lower? How easily can you integrate yourself in this new community?
- If you are thinking about relocating, how will the current housing market affect your decision? Do you need to allow more time to sell your home before you start looking for a new place?
- If you’d like to travel for an extended period of time on a regular basis, try to quantify those costs. Will you have “double” expenses for that time? For example, will you be paying rent in the new location and mortgage payments on your current home? Two sets of utility bills? Will you need to ship a car back and forth? These costs can add up fast, so it pays to think about it ahead of time.
- Will your health care cover you anywhere you choose to live? What types of changes would need to be made to other types of insurance coverage based on a change of residency?
- If you already have more than one home, do you anticipate selling any properties once retired? How does the rest of the family feel about that?
Speaking of family feelings, you’ll need to give some thought to how the kids will react to major changes in the household. Many retirees’ children are grown and launched in their own lives. But you’d be surprised how many of those kids still think of the house they grew up in as “home.” Retirement can be a time to follow your dreams and try new things, but be prepared for a variety of reactions from those closest to you.
Not everyone’s kids are completely launched at retirement. That may be a reason to stay in your current home for a while. As the kids get older, they may be able to continue with their lives while you travel for longer periods. Or perhaps you can time your adventures so that they can join you, although they may be reluctant to leave their own lives – even for a relatively short period of time.
- What considerations are there for retirement that would affect your children?
- How will you incorporate the needs of your kids once you’ve retired?
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