6 Retirement Planning Questions To Ask Yourself!

It has been said “Only two things are certain in life. Death and Taxes”, but what about before we reach the former? As we move into our 50’s and look towards our 60’s, health and retirement become more important than ever before. Assuming we are in reasonable health the big question we should ask ourselves is “will I have a comfortable retirement?” Too many of us retire without any planning and things often do not turn out as we would have wished, and as we get older many of us cannot rely on others for support, we will be on our own, so maybe we should be planning and thinking about retirement a little earlier? We cannot advise on everything about retirement and certainly you wouldn’t want us to, but below are a few questions to consider that may help you focus on the issues BEFORE you retire and maybe help you to think about some of the practicalities of retirement. 1.       Are you sure you want to retire? 2.       Have you set a date?  Are you flexible on your retirement date? 3.       Have you considered life away from work? 4.       Where are you going to live?  5.       Have you discussed retirement with your family? 6.       Can you afford to retire financially? Create an investment plan. Do a dry run. Know what your expenses will be in retirement. ·         Visualise your new lifestyle, any (new) sources of income and price out revised costs.  More leisure, more family time, more charitable work, “pocket money” income, non-executive income, investment management time ·         What can you expect i)         Early years expenses to be near pre-retirement levels but these should drop off as the routine of retirement kicks in BUT, at some point, health care & medical costs may drive expenses back up and you should be prepared for this. ii)       If you have an employer-sponsored retiree health care plan, consider the possibility that your employer might cancel or trim this benefit in the future. iii)      On average, retirees spend anywhere from 11% to 16% of their after-tax income on expected health care BUT don't forget (to plan to pay for) unexpected health care expenses, too. d.       For couples, plan for two eras in retirement; i)         when both are living, and ii)       when either one is the survivor. iii)      Pension choices can range from 0% to 100% to the survivor. Your initial retirement choice has a massive effect on the second retirement era. e.       Get a good feel for life expectancy i)         Life expectancy is the #1 driver for calculating your savings requirements There is a lot more thought needed to retiring than first meets the eye and if you need guidance on pre-retirement planning then talk to us, we can help you focus on achieving your goals and helping you set a financial plan that will work for you.