8 Tips for a Healthy Retirement Aiming For Wealth and Happiness
Retirement is known as the golden period of your life. This is a time when you have no deadlines, meetings, pressure to grow in your career, pressure to do the best among your peers, or other similar stresses. This is usually a phase where most people like to travel, pursue hobbies, relax, spend time with their loved ones, or learn new skills that they would enjoy and not for professional gains. These days a lot of people are also choosing to retire early. The financial independence retire early (FIRE) movement has gathered many followers over the years. Retirees are now looking to settle down in their 30s and 40s. As a result, the older definition of retirement is slowly becoming obsolete. Retirees today are not necessarily sitting in hospital waiting rooms or in line for medicines. Instead, they are traveling the world.
Irrespective of the definition of retirement you relate to, you have to plan for it well if you want to enjoy a happy and wealthy retirement. Retirement planning is perhaps one of the essential financial tasks you will ever undertake in your life. It is also a long one. It requires constant planning, meticulous decisions, professional retirement advice from a financial advisor, consistent savings, the ability to take a risk, being up to date, and a lot more. It is also critical to be prepared for any unexpected events in your retirement. For instance, home damage, health issues, long-term care needs, family emergencies, or more can turn your happy retirement into a miserable one.
It is important to know that a truly happy retirement is one that is supported with adequate savings. Your wealth will reflect in the way you live and how comfortably you can cater to your needs and wants in your retirement. Therefore, it may be advised to carefully plan for your retirement from a young age and use the right techniques to ensure financial freedom throughout your life. To ably plan for your retirement and have a customized retirement plan that meets your financial needs, get in touch with a professional financial advisor who can help you do the same.
If you want to know how to retire well, consider using the following retirement tips:
1. Make sure you have enough wealth saved for your retirement
As stated above, wealth can, in many ways, equate to a happy and comfortable retirement. Retirement can be a long time, depending on your life expectancy. If you retire at the age of 60 and live up to the age of 90, you have 30 years to bank upon your savings. If you plan to retire sooner, you could have an even shorter window. The only way to ensure that you never run out of funds for as long as you live is by saving and investing diligently in your working years. It can help to have a well-diversified financial portfolio of stocks, bonds, mutual funds, real estate, cash, gold, and more. Retirement accounts like a 401 account or an individual retirement account (IRA) can be a great way to build your wealth over time. Out of these, the former is a company-sponsored plan where the employer may match your contributions too. This can help you reach your goal sooner. In addition to this, you can follow a disciplined lifestyle where you have a budget in place. This way you will not spend more than you should.
When you make a retirement plan, make sure that you plan methodically, keeping your expected retirement age in mind. Keep reviewing your progress and make amendments and alterations whenever and wherever necessary. If you find that your retirement corpus is lower than what you need, it may be better to postpone your retirement by a few years. You can also consider curbing your expenditure. If you have debt, try to pay it off before retirement. Retiring with debt liabilities can hamper your happiness later. So, be mindful of your cash inflows and outflows. If you want to know more about how to retire wealthy, you can hire a financial advisor for professional retirement advice and guidance.
2. Have financial goals even during your retirement
Goals are not limited to your working years. They are as important in your retired years. Having a goal ensures that you have a purpose in life. While the nature of your goals can change with time and would likely differ at different stages of life, having them is what is truly crucial. A study conducted in 2019 on 6985 people over the age of 50 years revealed that having an aim or purpose in life affects a person’s mortality. The stronger the purpose, the lower the mortality can be, and vice versa. Having a purpose in life ensures that you have something to look forward to each day. When you stop working, your life can come to a standstill momentarily. Retirement is usually a phase where your children would likely be out and settled too. Most people spend most of their working years planning for their children’s future and focusing on their work commitments. Post-retirement, all of this can be lost. But a better way to retire can be to find a new goal. Your goal in retirement can be anything. For example, you can learn a new language or pick a new sport, etc. Some people pursue charity and social work too. You may even pursue your hobbies like horse riding, hiking, painting, music, and more. There are limitless goals that you can aim for. So, try to find your niche and interest and pursue your dream.
3. Prioritize your financial and physical health during your retirement
Health certainly is wealth. A healthy mind and body can live a happier life. So, pay attention to your health. This can be done on two levels. The first is by taking all measures to stay physically fit. This can include exercising even as you age. A lot of people stop exercising as they grow old. Keep in mind that you do not necessarily have to hit the gym. You can exercise as you please. Walking is a great light cardiovascular exercise for older age groups. You can also consider cycling, yoga, or running. You can join a group to stay motivated. Eating good food is another essential part of maintaining good health. So, ensure that you eat a balanced diet of fresh and locally produced food.
The second level of prioritizing your health entails being financially prepared for a health emergency. This can be done with insurance. So, ensure that your insurance is active with adequate coverage. You can also save in a tax-advantaged account like the health savings account (HSA). An HSA can be one of the best ways to plan for retirement. You can invest in stocks and bonds through your HSA and grow its value over time. Moreover, the contributions you make towards an HSA are exempt from tax. The earnings and distributions are also free from tax. However, you have to ensure to use the money for qualified medical expenses only.
4. Create an investment strategy for your post-retirement life
Investing beyond your retirement age is often overlooked. A lot is said about investing your money for retirement but not much about after retirement. It is important to understand that even though you may stop working and retire, other factors around you do not stop. Inflation continues to rise. Your wants continue to grow. And your savings pool continues to deplete. Therefore, you must account for your savings’ growth so that your money holds value in the future too. Your retirement investment strategy needs to be driven by capital preservation more than appreciation, as this may not be the right time to increase risk and expose your hard-earned money to volatility. Your asset allocation in stocks, bonds, and cash can be decided as per your age. As the commonly used formula, your equity allocation should be equivalent to 100 minus your age. So, if you are 70 years old, your equity allocation should be (100 – 70 = 30%). The rest can be distributed among bonds and cash. Since bonds form a major chunk of your investment portfolio, you can consider investing in corporate, municipal, and government bonds. In addition to this, you can also consider purchasing an immediate annuity. The chances of you running out of savings are lowered if you buy an immediate annuity. In an immediate annuity, you give all your savings to the insurance company, and the insurance company gives you your savings every month like an income. For example, the company will pay you $2,000 per month. The rest of your money will be invested by the insurer. If your money earns a profit, you will receive this as an interest. For example, you may receive $2,500. Immediate annuities ensure that you do not overspend your money sooner than scheduled. They also help you be more financially disciplined as you live as you did before retirement when you had an income.
Another way to invest in retirement can be in real estate. A rental real estate can offer you a regular income. Even though the investment amount is high, the rental income can help you stay afloat for a long time. Moreover, real estate can be a great family asset. It also has a high resale value. There are a lot of other investment options for retirees too. You can get more retirement tips on investing your money from a financial advisor.
5. Plan ahead for your taxes and implement effective tax-saving strategies
Taxes in retirement can reduce your retirement corpus. They can cut into your lifestyle, force you to lower your standard of living, and ultimately impact your happiness. So, one of the best retirement advice that you can follow is to plan ahead for taxes. There are several strategies to save tax. To start with, before you pick a place to retire in, make sure that you know about the tax laws of the state. For instance, Washington, Florida, Alaska, South Dakota, Texas, Nevada, and Wyoming do not charge any income tax. If you settle in any of these states, you will be able to save money otherwise spent on tax. Another way to lower tax is by offsetting tax on capital gains by harvesting your losses from other securities. This is known as tax-loss harvesting. In addition to this, you can consider investing in municipal bonds, as there is no federal tax on interest earned on municipal bonds.
It is also critical to plan your required minimum distributions (RMDs) efficiently so as not to fall into a higher tax bracket. You can also start planning for your taxes in retirement from a young age by investing in Roth retirement accounts. Roth accounts are not taxed in retirement when you withdraw your funds after the maturity age.
6. Spend time with your loved ones in retirement
Retirement can be a melancholic time for some. If you like working and miss the humdrum of your working life, you may find your retired years lacking any real value. However, it is important to keep yourself occupied with the right people. Try to spend as much time as possible with your friends and family. This can help you recharge. It is also good to socialize at this age. So, instead of being homebound, go out with your friends. You can join a club in your locality or join a group that shares your interests like a golf club, a meditation group, etc. Socializing with others helps you stay up to date and relevant. You also get to find a routine and pass your time productively. Moreover, you move around and stay healthy too. In addition to this, having your loved ones around boosts your morale and keeps you emotionally content. If you have grandchildren, you can also consider spending time with them. A lot of parents like to help their children around by babysitting their grandchildren. This allows you to pass your time and, at the same time, help your children manage their work commitments without neglecting their children.
7. Stay vigilant of your finances and security in retirement
Retired people may be an easy target for fraudsters. So, try to be careful of who you interact with. It is also advised to keep your money, assets, and important documents carefully, so you do not lose or misplace them. These can be misused if lost. If you stay alone, you can install cameras in your house. You can also keep a safe or a locker to store important property documents or jewelry. When making new friends, be careful and alert of who you invite into your home. Apart from this, you can also keep a list of all important phone numbers saved on the speed dial on your phone or stick a list on your dressing table or fridge door. This can include the local police authorities, your children, your doctor, your neighbors, etc. This way, you can save precious time in case of an emergency.
8. Do not be afraid to spend your money in retirement
While it is good to be prudent and cautious, it is equally vital to be happy. Your retirement savings are a sum of all your life’s hard work. Therefore, enjoying it is necessary. Instead of being frugal, try to enjoy your retired life by doing the things you like. Every once in a while, you can splurge on things that bring value to your life. This can be traveling, purchasing a new car, buying electronics, etc. Try to find the right balance between being financially smart and financially free. Instead of restricting yourself, spend on things that make you happy. This way, you are more likely to be the healthiest and happiest, even at age 70.
Your happiness in retirement or any other stage in your life depends on you and the decisions you make. While expert retirement advice can help you plan for your golden years, finding your true purpose and listening to your instincts can be far more important sometimes. So, try to find the things that offer you pleasure and value and surround yourself with people who appreciate and celebrate you. Whether it is your family or your friends, as long as you are surrounded by your loved ones, you can live a happy life. Additionally, focus on your finances too so that you can turn your wants into reality without any hassles.
If you want to know the best ways to plan for retirement, you can contact a professional financial advisor in your area too.
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