Transitioning into Retirement Confidently
Are you getting ready to retire? If so, congratulations! Retirement is an exciting and rewarding milestone in life. But it can also be a daunting transition. Many retirees face financial, mental, and physical challenges that they never expected. That’s why DuPont Wealth Solutions wants to help you make the most of your retirement years by telling you how to prepare for it in a healthy way. In this blog, we’ll discuss topics such as managing finances during retirement, finding new hobbies to fill time and stay active, how to stay connected with family and friends, and more. We want you to have a secure, fun, and fulfilling retirement. So, let’s get started!
Mentally Transitioning into Retirement
Retirement can be a difficult mental adjustment. It can bring up feelings of loss and confusion as you go from having a set schedule to having all the time in the world to do whatever you want. You may feel bored like you’ve lost your identity or purpose in life. While these feelings are normal, there are things that you can do to make sure you have a positive retirement.
Find A New Hobby – Keeping yourself busy is key to having an enjoyable retirement. Find something that interests you and spend time doing it regularly. This could be anything from learning a new language, gardening, or even volunteering with a local charity. Staying busy will help keep you sharp and give you a sense of purpose.
Turn Your Hobby into a Business – If you already have a hobby you love, now is the time to dive deeper into it! You likely wanted to devote more attention to it throughout your working years but never had the time. Whether it’s woodworking, painting, sewing, photography, or something else entirely, you can make money from these activities and supplement your retirement income!
Learn Something New – Retirement is a perfect time to explore new areas of knowledge and skills. Consider taking classes online or at your local community college. Some universities even offer free courses online, or for a minimal fee! Check out Harvard, edX, Couresa, and Study Hall for options. Whether you want to learn a new language, instrument, technology, or something entirely different, there’s a class out there for you. Learning something new will keep you intellectually engaged, plus it’s fun!
Get Involved in Your Community – Retirement is a great time to give back to your community. There are many ways to do this – from mentoring young people, volunteering at local schools or non-profits, or even running for public office. You can also join a club or social group in your area and make new friends who share similar interests. Your local senior center or recreation center are both great places to start.
Stay Connected – Loneliness is one of the most common problems that retirees face. Make an effort to stay in touch with family, friends, and former colleagues. Technology such as Zoom, Facetime, and social media make it easier than ever to stay connected. Even if you’re not tech-savvy, there are plenty of other ways to keep in touch – like sending a handwritten letter or giving someone a call.
Travel – Many retirees are in a great position to explore the world and experience new cultures. Travel can be an enriching experience, both mentally and physically. With proper planning, traveling can even be affordable! Don’t feel like you have to go halfway across the world to ‘travel’ either. Traveling can be done just within just a few hours of your hometown. If you’re experiencing something new in a new location, you’re traveling! Sometimes your local senior center will even offer discounted rates on group trips.
Working in Retirement – There’s no denying that people are living longer. Retirement used to only last 10-15 years, but with advancements in medicine we can expect retirement to last 30 years or more! That’s a lot of time to fill, and you’ll need a large amount of retirement income to support yourself during that time. To have a secure income, many seniors are continuing to work part-time during retirement. Talk to your employer about having a flexible work schedule.
Staying connected and engaged during your elder years can help you have a fun and fulfilling retirement. Find what interests you and do it! Keep learning, stay connected to your community, explore the world, or even start a business. With proper planning, you can make your retirement years the best of your life!
Physically Transitioning into Retirement
Where do you want to live during retirement? A lake house? Or a bungalow by the beach? Perhaps you want to stay close to family in your hometown. Here are some options.
Keep Your Current Home – Many retirees choose to keep their current home. This can be a great option if the home is paid off, or if you want to stay close to family and friends.
Reverse Mortgage – Reverse mortgages are great for seniors that anticipate serious health problems in the future. A reverse mortgage is a loan available to homeowners 62 or older that have considerable home equity. They have become one of the most popular and accepted ways to pay for many high-ticket expenses, including the cost of long-term care. The homeowner can borrow against the value of their home, and the loan balance becomes due and payable when the borrower dies, moves away permanently, or sells the home. This strategy works best when the home is already paid off, and when only one spouse needs long-term care while the other can remain at home.
Downsize – If your current home is too large for your needs, downsizing can be a great option. It can be a great way to save money during retirement while keeping those lonely ’empty nester’ feelings at bay. You’ll need to consider the cost of moving, real estate fees, and what items you will keep versus sell or donate.
Relocate – Relocating is a great option if you’re looking for a change of scenery. Maybe you want to move to a warmer climate, or closer to family. You may even be able to find senior housing that has all the amenities and services you need without having to worry about home maintenance or repairs.
Buy a Second Home – Buying a second home can be great for retirees who want to stay close to family but are also looking for a change of scenery. If you have the means and desire to travel, this can be a great option for you. You’ll need to consider costs such as real estate fees, taxes, utilities, insurance, and maintenance.
Whatever living situation you choose, make sure to account for health and safety. How accessible is the home? Are there medical facilities nearby? Do you have access to a supportive community? Figure out what your needs are now and plan accordingly.
Financially Transitioning into Retirement
As you transition into retirement, it’s important to have a solid financial plan in place. Here are some tips for making sure your finances stay strong during retirement:
Maximize Your Social Security – You cannot rely on social security to carry you through retirement. However, there are things you can do to make sure you maximize your benefit amount, including making sure you take your benefits out at the right time.
Keep Up with Required Minimum Distributions (RMDs) – RMDs are the minimum amounts you must withdraw from your retirement accounts each year, or incur a steep tax penalty. According to the IRS, you generally must start taking withdrawals from your traditional IRA, SEP IRA, or SIMPLE IRA when you reach age 72 (or 73 if you reach age 72 after Dec. 31, 2022). If you have a 401(k) or other profit-sharing plan with your workplace, you can delay taking out RMDs until you retire. Laws surrounding RMDs are constantly changing so it’s important to consult with a financial advisor when making decisions about how much to withdraw – and when.
Prepare for Long-Term Care – It’s important to plan for long-term care expenses as we age. Most people don’t want to think about it, but it’s essential that you prepare financially and emotionally for this stage in life. At DuPont Wealth Solutions, we can help you find the right long-term care insurance policy, navigate Medicare, and qualify for Medicaid.
Shift Your Investments into Low-Risk Alternatives – As we approach retirement, we want to make sure our savings are safe and available for us to use when we need them. We recommend scheduling an appointment with a trusted financial advisor and getting a 401(k) second opinion. Many of our clients choose to roll over their 401(k) into an IRA and/or purchase an annuity so they can have guaranteed lifetime income.
Draft or Update Your Estate Plan – With retirement comes the need to review your estate plan. Whether you’re starting from scratch or updating an existing plan, it’s important to make sure that your assets and wishes are properly accounted for. Our partners at the Law Offices of DuPont and Blumenstiel can help you with this.
Retirement is an exciting time! With proper financial planning, you can live the retirement of your dreams.
Learn about how we helped our client Gary transition into retirement!
Talk to the Trusted Financial Advisors at DuPont Wealth Solutions
Your retirement is what you make it. At DuPont Wealth Solutions, we provide you with unique financial tools tailored to your needs so that you can live the retirement of your dreams. Our trusted team of financial advisors in Dublin, Ohio have the knowledge and experience necessary to help you develop a financial plan that will carry you through retirement. Let us help you transition into retirement confidently and securely. Reach out today to learn more about our services and how we can help you. Call us at 614-408-0004 to schedule a consult.