“Spontaneity is a meticulously prepared art” . Attributed to Oscar Wilde
One of the most wonderful things about being retired is the ability to be spontaneous. You can stop what you are doing on a moment’s notice and take you granddaughter for ice cream. You can book that Alaskan cruise you’ve always dreamed of when airfares go on sale. You can find an Uber ride to take in the newest exhibit at your local museum.
But you can’t be spontaneous in retirement unless you’ve planned well in advance to secure the income you need to do so. You’ve worked for many years to provide a steady, consistent income that supports your lifestyle. You may own and maintain a home. You take regular vacations. You have season tickets to the symphony or your favorite sports team. All of this takes money.
If you are like many retirees, you have at least planned for the income your need to continue to enjoy these pursuits. And some of you have made plans to live on less. You’ve paid off the mortgage or moved to a condo. You’ve given up cable for Netflix. You’ve downgraded your cellphone plan.
But fewer of you have thought about future expenses. You need to have income for the day after you retire, and for 10 to 20 years after you retire.
Have you been hanging onto your car? Once it reaches 150,000 or 200,000 miles, you will likely need to replace it. Most residential roofs are only good for 25 years. Water heaters may last only 10 years. Health care costs will likely rise.
You can’t depend on Social Security alone. Fewer and fewer companies have defined pensions, and 401Ks and similar plans have rules and regulations you need to follow. You must educate yourself before you retire about how to maintain financial stability. You’ve become an educated consumer of good and services. Now you need to become an educated consumer about your life.
Financial planning for retirement is not rocket science, but you may not want to go it alone. Find a trusted financial advisor. Ask for referrals from friends and family members. Interview two or three advisors and check their references. There is no one-size-fits-all retirement plan, and there is no one advisor who is right for every individual or couple.
I highly recommend the most recent edition of Stan Hinden’s book, How to Retire Happy. It covers the 12 most important decisions you must make before you retire. We’ll be talking about more of these decisions in future posts. In the meantime, I’d love to hear from you. You can reach me at franlrandolph@gmail.com.