How to Really Be Ready for Retirement

Probably no less than just about 40 years ago, the stereotypical idea of retirement was sitting in the rocking chair on the front porch in the sunshine. Company pensions and Social Security provided lifetime income and often healthcare as well. Finances and age pretty much defined when you took retirement. The big challenge then was finding something to do with all that free time in retirement.

Nowadays retirement means something totally different for nearly everyone. Preparing for retirement takes a different set of actions as well. Finances alone no longer define if or when you can retire, but they still matter. Rather than provide lifetime pensions, most companies today let workers retire with one big check cut from their retirement accounts, such as 401k or 403b plans. For most people, that retirement check will be the biggest amount of money to ever pass through their hands.

It used to be companies had to worry about creating lifetime income for their retirees. Today, the responsibility usually rests with you. If you make a bad decision on how to use that big retirement check, your golden years are in jeopardy.

But there are other factors to a successful retirement besides finances. One decision is where to live. As you age, putting up with the weather (especially in the winter) may become less and less enjoyable. So do you move south, to traditional places like Florida or Arizona? If so, you’ll need to know what the costs of living are there, how retirement income is taxed by a state, property tax levels, etc.

Healthcare provider availability can be another critical factor to a successful retirement. The ideal place to live will also have top-notch but affordable medical facilities nearby. Since you will have time on your hands, you’ll also want events and activities conveniently available that you enjoy doing and that are meaningful to you.

Some type of part-time work, whether paid or volunteer, may also be part of a successful retirement. Certainly the social nature of “going to work” has benefits, as you are in contact with friends and colleagues working toward a common cause. Office friendships in retirement can often be more socially meaningful than in your younger working days.

So it’s not your father’s retirement anymore. The rules have changed and so have the players. As you get close to making your retirement decision, consider your finances, your location, your time and your social network; make sure you really are ready for retirement by maximizing your retirement readiness now.

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About Mike Wilson

Michael L. Wilson, MBA, CFP®, CRC®, is the owner of Integrity Financial Planning. Prior to founding Integrity in 1998, he worked for two years as a faculty member at the College for Financial Planning in Denver, training other financial advisors. Mike has 10 years of experience in the mutual fund industry, having worked with Fidelity Investments and Invesco Mutual Funds. He holds an MBA in Finance from Baylor University. Learn more about his work at www.integrityplanner.com.
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