Today’s retirement could last two or three decades, as people stay healthier and live longer, according to a recent article from WTOP, “Are you ready for 8,000 days or more in retirement?”
Along with this good news come the issues and questions surrounding the transitions before and during retirement. As you near retirement, you may be pondering how you want to spend your days and if you’ll have the savings to live the life you want. Hopefully, if you have been planning, you have a good sense of your cash flow and assets available for retirement.
A complete financial plan addresses cash flow sources and a realistic living budget, as well as Social Security, Medicare, long term care, insurance, taxes and estate planning. It’s critical to envisioning your future retirement. Many professionals believe it’s important to incorporate both quantitative and qualitative planning to allow for a fulfilling retirement and a life well-lived.
At the MIT Age Lab, instead of looking at retirement as an end, they consider a new retirement story that lasts on average for 8,000 days. The MIT Age Lab divides a person’s life into four equal parts of 8,000 days. Each segment lasts approximately 22 years: Learning (birth through college); Growing (start of professional career, relationship/marriage, start young family from your 20s to mid-40s); Maturing (prime career years, bigger homes, raising older children from mid-40s to mid-60s); and Exploring (retirement beginning mid-60s).
In its studies, MIT found that most people only had a vague idea of what they would do in retirement. It is remarkable that many see retirement as a single state. MIT found that without a clear vision, many retirees are unprepared for what comes next. While you may know exactly what you plan to do on Day 1 of retirement, do any of us really have a clear vision of Day 4,000? Initially in retirement, most have resources, good health and time for leisure activities, travel and social connections, along with the desire to pursue new interests.
Individuals and couples also begin addressing crucial “tactical” decisions that include where to live, how you will get around and with whom you will spend your time. That includes planning where and with whom to retire, as well as how much it will cost.
Meet regularly with your attorney to be certain your long-term plan is intact, can accommodate any changes and is in harmony with your estate plan.
Remember that retirement planning is not just about saving as much money as possible and figuring out the best way to manage the money through the stages of retirement. Planning for a loss of independence, including not being able to get around as easily or needing full time health care are also parts of retirement and aging that need to be addressed.
Reference: WTOP (May 9, 2018) “Are you ready for 8,000 days or more in retirement?”