The definition of retirement in the Merriam-Webster dictionary is as follows, “withdrawal from one’s position or occupation or from active working life.” I find this definition rather vague. If I was to define retirement, I would describe it as having the option to not work full-time if one chooses. As a CFP®, I look at retirement from a financial perspective, yet have expanded my view to include evaluating lifestyle. I see too many people retire who don’t know what to do with themselves, or find their health declining, or worry that their money won’t last. It is important to take a holistic approach when planning for retirement so that you are prepared for the personal challenges, as well as the financial ones.

Have you thought about your purpose in retirement? So many people’s identity is linked to their profession. Once they are no longer working or in their long-term profession, they are not sure who they are. Retirement can be a time of reinvention, identifying your values and passions. Have you always wanted to spend more time in the garden? Learn a new sport? Take a class? Travel? Some people go back to work not for financial reasons but to stay busy. Did you know that many states offer free tuition at colleges for residents over 60? In addition, the Osher Lifelong Learning Institute (OLLI) offers educational programs across the county on many interesting topics.

Health is another consideration in retirement. People are living longer and staying healthy, both mentally and physically. Check out free classes at your local recreation or senior center. I know a few people who teach the Bone Builder class that helps to prevent bone fractures and increase balance. Mentally, it is important to maintain social activities and interaction with friends and family. Studies show that people that are active and feel connected to others are at lower risk for health problems and likely to be happier.

Of course, your financial health supports your purpose, desires and well-being. Do you have enough money to cover even your basic expenses if you stop working in your current profession? Will your money last about 30 or even 40 years as many are living to age 100? Having a plan provides peace of mind and a roadmap so you can sleep at night knowing you have enough money to cover your basic expenses and do the extra things you have always wanted to do. The saying ‘if you fail to plan, you are planning to fail’ is so true.

Plenty of clients don’t properly account for their expenses and really don’t know where their money goes, especially with respect to healthcare. You may think Medicare covers all your healthcare costs in retirement, but that is not true. According to the Fidelity Retiree Health Care Cost Estimate, a single person aged 65 in 2023 may need approximately $157,500 saved (after tax) to cover health care expenses in retirement. An average retired couple age 65 in 2023 may need approximately $315,000 saved. 1

With respect to income, Social Security was signed into law in 1935 to provide some measure of protection against job loss and poverty-stricken old age. It was never meant to fully support us as we entered our 60’s. The reality is Social Security for most of our clients, will only cover approximately 1/3 of one’s expenses. I recently read that the Social Security trustees now have enough money to fund benefits through 2035. That means that each individual has to take responsibility to plan for their future: your purpose, dreams, desires, health and wealth. Your 80, 90, or 100 year old self will thank you!

1 https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs West Financial Services, Inc. (“WFS”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. You should carefully read and review all information provided by WFS, including Form ADV Part 1A, Part 2A brochure and all supplements, and Form CRS.

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