Broker Check

Retirement: Financial and Emotional Readiness

| April 23, 2021
Share |

Knowing when and how you would like to retire are thought-provoking questions. Determining what retirement means specifically to you involves careful thought, planning, and even some dreaming about what will make you happy.

 

For many, retirement is one of the most important decisions they will make in their lifetime. The basic, universal definition of retirement refers to the “time of a life when one chooses to permanently leave the workforce behind.” But, as we all know, retirement requires preparation. You may ask, “Will I have enough money when I want to retire? How much can I afford once I retire? What type of lifestyle have I budgeted for when I retire?”

 

All of these, and more, are difficult questions that should be asked and answered. Some people target a specific retirement age, commonly between 62 and 66. Others aim for a specific dollar figure in their retirement accounts. And reaching beyond the financial goals set for retirement, people must also consider the emotional component. Life will change; the daily job routine will be no more. How will you fill your time? Some have bucket lists they’ll happily check off as the gift of time has rewarded their years of service. Others may be less focused, and boredom or restlessness could set in.

 

Every retirement plan is unique, just as each person is unique. Questions regarding financial and emotional readiness may differ depending on the individual, family, and professional situation. Following are a few topics we believe you should ponder and address when considering retirement.

 

Am I financially prepared to retire AND live the way I want to?

When determining whether you are financially ready to retire, be sure to attend to some big-ticket areas, including assessing your spending and your family’s needs, calculating income from various sources you may have, ensuring that you have some liquid cash, and managing your healthcare coverage.

 

Of course, there are other factors, but let’s break down the aforementioned:

  1. Assessing your spending

Estimate how much it will cost you to live as a retiree, and how expensive it may be to embrace the lifestyle you imagine. Creating a budgeted framework to calculate your likely spending habits is a great starting point. The more precise your budget, the better equipped you will be to determine when you can enjoy the fruits of your labor.

 

  1. Calculating income

Consider all of your retirement accounts, social security, income from rental properties and other investments. Crunching the numbers and mapping out your projected income against projected expenses is perhaps one of the most accurate determinants in retirement readiness.

 

  1. Ensuring cash liquidity

Having some liquidity in cash can be very important for many reasons. It is generally a good idea to have money in a savings account for use in the event of a financial surprise. No one has a crystal ball, so in the event of an emergency, accessible, liquid cash allows you to pay bills without withdrawing from your investment accounts.

 

  1. Managing your healthcare coverage

As a member of your employer’s healthcare plan while you’re working, chances are you will not be permitted to participate in that plan in retirement. At age 65, however, you are eligible for Medicare, which may cover most of your retirement medical expenses. Keep in mind, healthcare costs vary depending on an individual’s situation. Planning, using your health status as your guide, will help ensure you’re prepared to be well in retirement.

 

How does my spouse, significant other, or children feel about me retiring?

As you consider retirement, it’s a great idea to include your loved ones in the conversation. Yes, you have worked hard for years to put yourself and your family in a sound financial position to retire, but you should consider how your retirement will impact those dearest to you. Communicating your plans may help prevent any major surprises after the big event. Making certain that all interested parties are on the same page will help allow for a smooth transition and deliver peace of mind.

 

How will I spend my time once I retire?

This is the fun part! Beyond the financial aspect of retirement, decide what it is you would like to do. Charting a course, no matter how detailed, can serve as a guideline for what comes next. Some decide that full-fledged retirement lacks appeal and may choose to work part-time or provide consulting services. Others may jump at the opportunity to develop hobbies or explore interests such as traveling. Still, others may long to give back to the community by volunteering and performing good works. Your interest may be a mix of all, or perhaps none listed. There is no wrong way, just your way. Take some time to think about how you would like to spend your time in retirement. Possibilities are endless.

 

Do I think I will be happy in retirement?

Deciding to retire is not just a financial decision, but also an emotional and psychological one. As mentioned, retiring is not just waving goodbye to the workforce. In many instances, people who are happiest during retirement are the individuals who have figured out what they want to do and how they plan to devote their time after they retire. You have spent years committing your time and talents to reach the point where you may choose to retire. We at PCG believe you should enjoy it. Soak in the activities and opportunities you love, and welcome new adventures - whatever sparks your fancy.

 

Regardless of when you plan to retire, Private Capital Group can help you plan for it. Every individual’s financial and emotional state is distinctive, and we believe that every retirement plan should be specifically motivated by the individual client. Engaging in dedicated conversation with your wealth advisor and using our industry-leading financial planning tools and software can help you visualize your retirement and gauge when and how you can retire on your terms.

 

Your PCG Wealth Advisor is eager to collaborate and design a retirement plan that is unique to you. Your future matters – let’s plan for it now.

 

Enjoy your weekend!

 

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Private Capital Group, LLC (“PCG”), or any non-investment related content, made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Information contained in this communication is based on data gathered from what we believe are reliable sources. It is not guaranteed by PCG as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. Further, you should not assume that any discussion or information contained in this communication serves as the receipt of, or as a substitute for, personalized investment advice from PCG. To the extent discussed herein, investment indices are unmanaged and cannot be purchased directly. Historical performance results for investment indexes and/or categories are included for informational purposes only and generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  PCG is neither a law firm nor a certified public accounting firm and no portion of the communication should be construed as legal or accounting advice.  A copy of the PCG’s current written disclosure Brochure discussing our advisory services and fees is available upon request.
Please Note:  If you are a PCG client, please remember to contact PCG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  PCG shall continue to rely on the accuracy of information that you have provided.
If you do not want to receive further editions of this weekly newsletter, please contact Private Capital Group at 860.561.1162, or e-mail: privatecapitalgroup@pcgct.com, or write to us at Private Capital Group, LLC, 29 S. Main Street, West Hartford, CT 06107.
Share |