How Envisioning Your Retirement Helps With Creating a Plan

What do you want from your retirement? The answer to that question should play a significant role in guiding your retirement savings decisions.

Many people are homebodies, live near their children and grandchildren, aren’t huge fans of traveling and enjoy relatively affordable hobbies. They might want nothing more than to maintain a comfortable lifestyle while living in their current home.

Other retirement planners might be passionate about travel and adventure. They may be looking forward to downsizing to a condo in a ritzy resort-style senior community and using that residence as a home base from which they will regularly jet off on international adventures.

There are literally thousands of people in Phoenix who fall into one of those two categories or somewhere in between on the spectrum of retirement dreams. The resources one couple might need to purchase an RV and drive around the country during Phoenix’s hot summers might be entirely different than the resources jet-setting world travelers will require.

Envisioning what you want out of retirement, especially when you’re still young enough to save accordingly, can be hugely beneficial. It may help you better budget your retirement savings account contributions and give you ample time to research various retirement living opportunities.

Plan for the Unexpected

While the resources retirees need can vary dramatically based on their own personal preferences, there are some potential costs that could affect anyone in retirement, regardless of their goals. Those costs include things like assisted living, at-home care or memory care for you and your spouse. Medical emergencies and health complications can impact any retiree, and it’s important to have contingency plans and the funds necessary to tackle those complications.

Your retirement savings won’t be the only thing that matters if the need for something like memory care arises. A well-planned estate, trusts and Medicare planning may help you and your spouse or partner mitigate the financial impact of unexpected health complications. 

Medicare planning is one of the many services Fullerton Financial Planning offers to retirement savers and investors in the Phoenix metro area. We can help you understand the many factors that may affect your Medicare eligibility and the types of supplemental plans that can help insulate you from changing medical costs.

Start Budgeting Early

People’s interests can change over time, but many people know themselves well enough in their 40s and 50s to envision their ideal retirement in their 60s. Understanding what you want out of retirement enables you to establish cost baselines.

Recent events have demonstrated the eroding power of inflationary pressures, and it’s served as a good reminder to keep inflation in mind when budgeting for the future. While nine percent inflation is far from the norm, you should budget for some degree of inflation. Compound growth of your retirement investments can help offset inflationary pressures, but you should still assume that the cost of your hobbies or travel plans will cost more in 20 or 30 years.

Even today, you should be able to formulate a rough idea of what those things will cost you. Having a general idea of your potential retirement expenses should help inform your overall retirement investment strategy.

You may also have opportunities to put money down early on certain high-cost expenditures. For example, some higher-end retirement communities offer pre-opening deposits to people who want to buy into future developments. Those developments may not be opening for five or 10 years, but you may be able to lock in some of those costs at today’s prices by putting money down in advance.

Many funeral homes also allow people to pre-pay for funeral and burial expenses in today’s dollars, so your family won’t have to pay the higher costs 20 or 30 years in the future.

Steps to Take Early to Prepare for Your Retirement

Envisioning what you want out of retirement is a useful exercise when you’re middle aged. It may also be an effective tool for providing personal inspiration and motivation. It’s easier to work hard towards a goal when you can envision and look forward to it.

Fullerton Financial Planning is here to help you on your journey. Meet with our financial planners or retirement planners so we can help you establish a plan to reach your retirement savings goals. Call (623) 974-0300 to get started.