How to Prepare for Retirement - More than Finances

Preparing for retirement is a lifelong task and one that takes plenty of planning and foresight. However, no matter where you are in your retirement planning, there’s always something proactive you can do to make your retirement years more comfortable and fulfilled. Learn more about retirement below, and check out our retirement checklist to learn how to prepare for retirement the right way.

Stages of Retirement

Before learning how to prepare for retirement, it’s a good idea to get a better idea of what retirement means for seniors. While we tend to think of retirement as a single transition out of our working life, the fact is it’s a much more gradual process. There are four phases of retirement, which can help explain how we transition into old age over decades.

1. Pre-Retirement

The term pre-retirement refers to the decade leading up to retirement, starting in your early to mid-fifties. While it’s a good idea to start preparing for retirement before this point, this is when you start to get a clearer picture of what your financial, social, and physical life will look like in old age.

During pre-retirement, it’s a good idea to start taking a closer look at what your retirement will look like by asking specific questions. Where will you be living? What kind of social security benefits can you expect? Are there any health concerns to worry about? By asking these sorts of questions and taking steps to address them, you can entire retirement better prepared.

These days, many people continue working well into old age. If you’re thinking about doing the same, take a look at these top jobs for seniors.

2. Early Retirement

Not everyone retires at the same age, but generally, we can expect the period of early retirement to come in your early, mid, or late sixties. This is a period of financial and social transition when you will adjust to a broad range of lifestyle changes. In much the same way as young adults need to adapt to the working world, new retirees need to take the time and space they need to cope with the various changes they will face.

This process will look different for everyone, but from a financial perspective, you can expect to start receiving social security. Socially, many seniors of this age find that they experience elderly loneliness, which means it’s more important than ever to be proactive when connecting with others.

3. Mid-Retirement

Throughout their seventies, many people’s social and financial lives begin to slow down. This period is known as mid-retirement. In many cases, older adults choose this time to move in with a loved one, downsizing their home, travel less, and focus more on health concerns. Of course, this depends largely on personal circumstances. Many older adults continue to stay relatively active well into their eighties.

From a financial perspective, mid-retirement is a good time to start estate planning. You might consider naming someone close to you a financial power of attorney who can act on your behalf when necessary.

4. Late Retirement 

In their eighties and nineties, many older adults faced increased healthcare costs. This, combined with limited mobility, means that it may be more difficult to stay connected with friends and family members. It’s especially important to plan for late retirement if you want to live a comfortable and socially active life.

For seniors who haven’t already turned to an assisted living facility or other long-term care solution, now may be the time. Assisted living, nursing homes, or home care can e a good way to get regular medical attention while staying connected with a community.

Retirement Checklist

Planning for retirement can feel overwhelming at first. Luckily, by breaking it down and staying organized, you can enter retirement fully prepared.

• Manage Your Finances

  The financial side of retirement may have the biggest impact on your quality of life because it plays a role in the rest of the retirement checklist. Before you can consider living arrangements or building a healthcare plan, you need to have a clear idea of what kind of resources you’re working with. For more information on the financial side of retirement planning, take a look at the section below.

• Consider Living Arrangements

  Since retirement comes with many changes to your financial life, many people take the opportunity to consider long-term living arrangements. This might mean upsizing or downsizing your house. Or, if you’re already in late retirement, it might mean moving in with a family member. No matter where you are in your retirement journey, it’s good to think about the future and make a plan that fits your needs.

• Talk to Your Doctor

  By retirement, you should already have a good relationship with a primary care doctor. But if you don’t, it could be a good time to start. Having a clear understanding of your physical health is crucial when making long-term retirement plans. For example, if you suffer from mobility issues, you may want to prioritize finding a long-term caregiver.

  If you are suffering from mobility issues, it may be time to upgrade to a high-end scooter.

• Talk About a Care Plan

  Even if you’re in the early stages of retirement, it’s still not too soon to talk to your family about a long-term care plan. Even if you don’t need a regular caregiver for years, starting the conversation now can help make sure everyone is on the same page. Once you know whether you’re looking to family members for care, an in-home caregiver, or a nursing home, can change the way you look at old age.

• Deciding What to Do with Your Free Time

  While leaving your day job might sound like a dream come true, the reality is that many older adults feel a sense of loneliness or boredom in retirement. Failing to fill this time can even contribute to mental decline in your later years. That’s why it’s important to stay active and keep your body healthy and mind sharp. There are plenty of ways to fill your free time, but here are some ideas to get you started:

  • Volunteering is one option that can be great for a variety of interests. Food banks, tutoring services, and community projects are always looking for volunteers
  • A part-time job can lessen your workload and let you gradually transition out of the workforce.
  • Picking up a new hobby like painting or gardening can provide you with hours of activity each day.
  • Traveling is another popular way seniors fill their golden years, letting them experience corners of the world they never knew existed. Just make sure to prioritize your health.
  • Even if you’re stuck at home, there are plenty of ways to fill the time. Check out our complete guide for more ideas.

Managing Your Finances for Retirement

One of the most important aspects of retirement planning revolves around your financial life. Learn more about financial planning for retirement here.

Set a Savings Goal

We’re commonly told that it’s never too early to start saving for your retirement, but the truth is it’s never too late, either. While saving early helps you accumulate more interest over time, the saving you do in your 50s and early 60s can make a big impact too. The important thing is to start good spending habits and stick to them. Once you have an idea of your monthly savings, you’ll have a clearer picture of how much money you’ll have 5, 10, and 20 years down the line.

Manage Debt

While savings can grow over time, the same is true of debt. That’s why it's important to take care of debt as early as possible to ensure you have a safe and secure financial future. There are a few ways you can go about doing this:

• Try paying cash for major purchases, rather than charging to your credit card
• Think about accelerating mortgage payments, and see if it's possible to pay off the loan before retirement
• Pay off high-interest loans first, so maximize your savings.

Check Social Security Benefits

While social security benefits can vary from person to person, you can expect between $1,800 and $3,600 per month. For a more accurate estimate of your social security benefits, take a look at this quick calculator. Getting an idea of your benefits can help you get a clearer picture of your financial future during retirement.

Consider Future Medical Costs

Luckily, medicare covers a variety of routine healthcare costs. However, it’s important to remember that it doesn’t offer complete coverage, which is why so many people consider supplementary medical coverage to help pay for other expenses. Especially for older adults, nonroutine healthcare costs take up an increasing amount of doctor visits.

It always pays to buy long-term health care insurance early, as your premiums will be lower. This can help cover a variety of supplemental expenses, such as a home aide.

Preparing for Retirement One Step at a Time

While there are many aspects of social, physical, and financial health to keep in mind when planning for retirement, taking the first step doesn’t have to be hard. The important thing is to get your wheels turning, so you can stay proactive. After reading the above article, you should have a better idea of your retirement strengths and weaknesses.