It’s common knowledge that the average lifespan is getting longer. While this is good news, it also means that the amount of time people are spending in retirement is increasing.
In order to prepare for a potentially decades-long retirement, it may help to keep some of the following tips in mind.
Maximize your financial resources
Assembling an income plan for retirement is a little bit like putting together a puzzle. Your income will likely come from several sources, and it is a good idea to ensure you are maximizing each piece.
Is there a part of your portfolio you need to de-risk to avoid potential losses? Maybe you need to wait a few years in order to maximize Social Security payments. Is there an asset you need to liquidate in order to generate cash?
These are examples of very important considerations that you and your financial advisor should discuss together.
Whether you realize it or not, a lot of your daily social interactions are with people you work around, whether that’s coworkers or clients. Suddenly stopping those interactions may have a greater impact than you realize.
Now is the time to imagine what your social life will look like in retirement. What sort of people will you want to be around, and where will you find them?
Change your income mindset
A psychological shift must take place when you transition from actively earning money to living on assets you have already created.
Your “paycheck” will now come in the form of portfolio withdrawals, Social Security income, and maybe a pension (if you’re fortunate).
Whether this shift is good or bad depends on your situation, but it is important that you take time to reflect on the upcoming change and how it will affect your life.
Cut down the debt
Pre-retirees are carrying more debt now than they have in recent history. Don’t be one of the many people letting debt weight them down in retirement.
Some experts recommend being out of debt before starting Social Security income. It’s hard to argue with that advice. Consumer debt often carries high interest rates that can actually outpace the return on long-term investments – resulting in a net loss.
Be sure your debts are under control – or better yet, eliminated – before retiring.
Embrace this exciting new season
Pop culture tells us that youth is to be desired above anything else. While there’s nothing wrong with being young, later years can be just as rewarding.
Imagine what an ideal retirement would look like for you. Are there places to which you have always wanted to travel? Maybe there’s a hobby you’ve wanted to pick up but just haven’t had the time.
These are your years to do what you want to do. Enter retirement with enthusiasm.