At one time or another, just about everybody looks ahead to retirement and fantasizes about how they’re going to spend their leisure years. Sleeping until 10:00 a.m. every day, playing golf five days a week, tackling home projects, traveling, dining out, attending cultural events – it sounds like a fantasy lifestyle. If the fantasy is ever going to become a reality, however, it’s important to consult with a financial advisor to help you navigate your pathway to retirement.
Below are some tips to help you begin creating your roadmap:
Determine the Lifestyle You Want to Live in Retirement
Many people make the mistake of assessing their basic living expenses and think once they can make enough money in retirement to cover those expenses, they’re home free. Not so fast. Ask yourself the following: Do I want to take vacations? Go out to eat once or twice a week? Attend concerts, cultural events, or sporting events with some regularity? If yes, you aren’t quite ready to retire just because you can cover your monthly living expenses. These activities all require above and beyond basic living expenses. If you plan to live an active retirement, you need to budget for these types of activities. As your lifestyle shifts from saving money to spending it, you’ll need to determine a monthly and annual withdrawal rate from your savings to supplement your other income sources. The good news is that a financial advisor can work with you in creating a budget that makes sense given your lifestyle and your goals.
Plan for Unforeseen Medical Expenses and Long-Term Care
One of the unfortunate aspects of aging is that we generally require more medical attention the older we get. While you can count on Medicare coverage for health insurance once you reach age 65, you’ll still likely have significant out-of-pocket expenses if you encounter a serious medical issue that requires a prolonged hospital stay or a series of medical appointments. It is wise to have some extra savings stashed away in case such a situation arises.
In addition, you may need long-term care at some point once you can no longer care for yourself. It is wise to look into long-term care insurance to help pay for care provided in a nursing home or assisted living facility.
Don’t Take Social Security Too Early
You’re eligible to apply for Social Security benefits at age 62. However, by receiving Social Security payments as soon as you’re eligible, you’re leaving a lot of money on the table in future years. Social Security payments increase by 8% annually all the way to age 70, but your benefits will be reduced if you start receiving them before your full retirement age. For example, if you turn age 62 in 2026, your benefit would be about 30% lower than it would be at your full retirement age of 67.*
Furthermore, if you start collecting Social Security before you reach your full retirement age, you will have to deal with early income limitations. That means your Social Security payments will be reduced if you earn even a modest amount of income. It’s best to consult with your financial advisor to determine when the right time is for you to begin receiving Social Security payments based on your specific financial profile.
Article provided by Robert Cleary, Senior Vice President/Investments, with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted at Stifel’s 3 Bryant Park office at (212) 847-6517.
Source:
*Retirement Benefits, SSA.Gov, 2026
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