Pretend You’re Retired for a Month

 

Lessons to learn from this experiment on being retired.

Retirement is ideally a happy time of your life, freeing you up to do things you’ve long postponed. However, the prospect of being retired can also cause stress if you’re not sure you have enough money to retire in the lifestyle you’d like. We suggest a dry run: Try living for a month on your projected retirement income. The results might be eye-opening.

Now’s the time to calculate your monthly retirement income. You’ve built your wealth over your career, and it will soon be time to reap your rewards. Social Security is just a drop in the bucket. You have your retirement accounts, your investment portfolio, your real estate holdings, and any annuities and other income arrangements you’ve made.

You deserve a full, rich lifestyle when you retire. Living a month as a “retiree” will quickly bring home how your financial resources match your dreams. Perhaps you want to travel, or buy a yacht, or move to an elegant retirement community. Or maybe you’d like a pied-a-terre in a large city where you can enjoy fine restaurants and cultural amenities. It’s your choice, but that choice might be constrained by your income.

Retirement is a time of choosing. You might find that your monthly retirement income will require some hard choices. Seniors often want to simplify their lives, but many may be forced to make sacrifices they haven’t contemplated. On the other hand, many might be intimidated by inflation and the prospect of a long life, wondering whether the money will last.

Planning early can give you an idea of your future retirement income and help prepare you for inflation. Ideally, you’d like to begin planning your retirement at least a decade in advance. Living a month on your projected retirement income will reveal any gap between what you want and what you can afford. The sooner you start planning, the narrower the gap. You might be retired for a long time. Planning helps address the worries of outliving your money, or having to hem in your lifestyle.

Work with an investment professional to prepare for retirement. Your retirement experiment might alert you to the need for better retirement planning. Contact a financial advisor to discuss formulating a plan to address your goals in retirement.

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Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Diamond Credit Union and Diamond Financial Planning are not registered broker/dealers and are not affiliated with LPL Financial.

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This information has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting, or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax, or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.

The views, opinions, and ideas articulated in this blog are just that, and should not be construed as financial or legal advice. The writers of these blogs are educated on the topics they are writing about, but they are in no way licensed financial advisors or registered investment advisors. Diamond Credit Union is not responsible for any actions a person may take as a result of the information they read in one of our blogs.