For many people, transitioning from working to retirement comes with compromises. Generally, those compromises center around the lack of options.
A lack of options is the result of not having enough saved for this next phase of life. Thankfully, there are things that we can do to help.
Recently we’ve helped lots of people have more options as they move into retirement than before they started working with us. It’s what we do.
Even if you are already in retirement, we can help as well.
While everyone’s situation is unique, here are some common compromises people make in their retirement years…
REDUCED LIVING EXPENSES
Retirees often need to adjust their spending habits to match their reduced income. This may mean downsizing to a smaller home, cutting back on discretionary expenses, or finding ways to save on utilities, insurance, and other costs.
What we’ve found lately is that most people want to maintain their current lifestyle into retirement.
There are many different ways that you can make sure you maintain your standard of living in retirement that we can help you with. We call it strategic income planning.
TRAVEL & LESURE
Many people dream of traveling extensively during retirement, but financial constraints might lead them to compromise on the frequency or scope of their trips. They may opt for more budget-friendly destinations or closer-to-home excursions.
When it comes to this aspect of your retirement we find it’s helpful to get very detailed in what you want to do. In what your goal is. When thinking about traveling in retirement make sure you know exactly where you want to go. What you want to do. Whose hand you are holding? Are your feet in the water? What color is the sand? What are you doing?
By you having clear travel goals for retirement, that will help you and us, you will be more likely to see them come true.
POSTPONING MAJOR PURCHASES
Large expenses like buying a new car or taking on home improvements might be put on hold during retirement. Financial prudence often dictates delaying non-essential purchases until more funds are available.
If you know you are going to have big purchases go ahead and make that part of your plan. We can help make sure that buying a new car or replacing your HVAC won’t knock your retirement off course.
Some retirees may choose to work part-time to supplement their retirement income. While it can provide financial stability, it might involve working in a different field or accepting less demanding roles.
Healthcare costs can be significant in retirement. Some retirees may opt for less comprehensive health insurance plans to save money, potentially leading to higher out-of-pocket expenses.
This really comes down to knowing your options. When you get to retirement, at least for most of your retirement, you will be on Medicare. You want to make sure you get this right because getting it wrong can have a huge impact on your retirement.
For one couple we began working with later in their lives they said that if they had chosen the right Medicare plan, they could have moved closer to family instead of having to settle for where the cost of living is really low in order to pay their medical bills.
We can help with this.
Retirees may need to provide financial support to adult children, grandchildren, or other family members. This can impact their own financial security and their ability to maintain their desired lifestyle.
Helping others is a good thing. You just need to make sure you understand what your bandwidth is to help.
For one couple, we were able to tell them that they could financially help others up to $25,000 a year and still have enough money to last their lifetime.
Make sure you know your bandwidth.
To maximize Social Security benefits, some people choose to delay claiming them until a later age, which means compromising on an earlier retirement or relying on other income sources until they start receiving benefits.
Social Security is a part of your overall retirement income plan. You need to make sure everything you are doing is working in the right way to allow you to maximize your income and reduce your taxes.
IN-HOME CARE VS. ASSISTED LIVING
As people age, they may face decisions about where and how they receive care. Some may compromise on their desire to stay at home by moving to assisted living facilities or retirement communities for added support.
Medicare will pay up to 100 days of skilled-nursing care. You need a plan starting on day 101. What asset will you sell first to pay for care?
There are ways you can plan for this and protect what matters most.
It's important to recognize that retirement compromises are highly individualized, and what one person might consider a compromise could be a conscious choice that brings them contentment and satisfaction in their golden years. Proper financial planning and exploring available resources can help retirees navigate these decisions and find the best solutions for their unique circumstances.
ABOUT THE AUTHOR: Cory Carlton is the CEO & Co-Founder of Both Hands Financial Group. He likes to tell people that his job is to plan for the things they don't see coming. He is passionate about helping protect people, their families, and their dreams by using the right planning tools. To Cory and the entire BHFG team, it's a passion to serve others. When Cory is not working he enjoys spending time with his wife and their four children. Usually, they are outside.