Getting to a complete retirement plan

How should I spend my time?

When planning what your retirement life will be like, it's important to remember that certain aspects of your working life will no longer apply. For most retirees, that's not only a steady income—it can also be your social connections, purpose and goals, and mental stimulation.

With that in mind, here are some ways to keep yourself connected and engaged:

• Give back. Volunteering can be a meaningful way to spend your time. You can help others by using the skills you developed during your career, or even learn new ones.
• Stay active. Poor health can derail the best-laid plans. Look for ways to build exercise into your postretirement days, as well as activities to keep your mind sharp.
• Take classes. Retirement is a great time to finish your degree or simply learn something new. You can also choose from hundreds of online courses, some of which are free.
• Start traveling. Maybe you'd like to do some cross-country RVing or are dreaming of a future international trip. Just keep in mind that traveling can be expensive. Make sure your anticipated retirement income aligns with your goals.
• Be social. Much of what retirees miss about work is the relationships they've built. So make a plan for maintaining your current relationships and building new ones.
• Keep working. The 2022 Retirement Confidence Survey found that 70% of workers expected to do some type of paid work in retirement. Although the continued income is an incentive, you may choose to keep working because you enjoy the routine of it.

Avoid these pitfalls if you keep working

Even if you decide to keep working, you shouldn't put off certain retirement decisions. Avoid these missteps so they don't end up eating into your income:

• Taking Social Security early and having part of your payment withheld.
• Not taking your required minimum distributions (RMDs).
• Underestimating your taxes.
• Neglecting to enroll in Medicare.
• Triggering Medicare surcharges.
• Missing out on making additional IRA and retirement plan contributions.
• Failing to factor in health care costs.
• Missing opportunities to complete Roth IRA conversions.

Where should I live?

Once you have an idea of what you want to do in retirement, the where may become clearer.

Here are a few options to consider:

• Staying put. According to AARP, 75% of people age 50+ want to remain in their current home. One reason to stay is the cost savings if your home is paid off.
  
  However, you'll still need to plan on covering maintenance expenses, property taxes, and modification costs.
• Moving away. You may want to consider living in another part of the country. Some states are more retirement-friendly than others, offering a lower cost of living, better access to health care, lower taxes, and more.
• Going smaller. Downsizing is an attractive option if you want less to maintain. You could also realize a profit from selling your home and then reinvest those dollars back into your retirement savings. Just remember to account for any moving­-related expenses.
• Joining a community. If you're social and like to participate in organized activities, a retirement community might be right for you. And if you're concerned about how you'II cope as you age, try finding a community with graduated care services. Just be aware that these communities often charge hefty up-front fees in addition to your monthly living expenses.

When should I retire?

Once you've figured out what you want to do and where, you also need to decide on the when.

See when you can retire

Assuming you have or will have the money you'll need, here are a couple of other things to consider in determining when to retire.

Taking early retirement

Generally, this means retiring before the ages you'd qualify for Social Security or Medicare—62 and 65, respectively. If you have a plan for what you'll do with those extra nonworking years, the main thing to consider is that you'll most likely need to save more.

When to start taking Social Security can also play a role in your retirement planning strategy. If you have income sources to fund the beginning years of retirement, Social Security grows at a significant rate (8% per year), making it appealing to delay taking the benefit if possible.

Retiring earlier gives you less time to accumulate assets and means you'll be drawing on those assets longer. Once you've put together a reasonable retirement budget, you may want to test it out for a year or so. That way you can make any adjustments while you're still bringing in a paycheck.

If you're thinking of retiring early, it would be wise to meet with an advisor sooner rather than later so they can help you figure out how best to make it happen. If you have a spouse or partner, you'll want to discuss this plan with them as well.

Retiring together or separately

If you're planning for retirement with a spouse or partner, it's good to think through different scenarios of how it could play out. Although you may picture retiring together, it may not be what works best for you both. You'll need to consider your ages, your individual jobs and incomes, and your ideas of what retirement will look like.

It's important to get on the same page well before it's time to start that next chapter. But by working together, you can come up with a plan intended to maximize your monthly income benefit while still meeting your immediate spending needs.