What your retirement looks like is unique to you.
Chances are, however, whatever you're picturing, it's not your investment portfolio. But when people prepare for retirement, they often focus on finances, forgetting about the other essentials.
What your retirement looks like is unique to you.
Chances are, however, whatever you're picturing, it's not your investment portfolio. But when people prepare for retirement, they often focus on finances, forgetting about the other essentials.
I tell my clients that achieving a happy retirement is as much about their purpose—what they want to do and where they want to do it—as their portfolio.
Plan for how to fill your time
Less than half of workers have thought about what they'll do in retirement.*
Staying on the job
The majority of workers expect to keep working in retirement.*
Less than 50% of workers have thought about how they'll occupy their time in retirement, according to the 2020 Retirement Confidence Survey.
It's important that your plan for what you'll do in retirement factors in the aspects of working that you'll miss. For most retirees, that's not only the steady income. It's the social connections, the purpose and goals, and mental stimulation.
Keeping that in mind, here are some options for ways you can keep yourself connected and engaged:
Even if you decide to keep working, you shouldn't put off certain retirement decisions. A financial advisor can help you avoid these missteps so they don't end up eating into your income:
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:
As you start to think through the possibilities, you may want to meet with an advisor to help you weigh the pros and cons of each option.
1. Florida
2. Colorado
3. New Hampshire
4. Utah
5. Wyoming
1. Hawaii
2. California
3. Connecticut
4. Minnesota
5. New York
1. Mississippi
2. Alabama
3. Oklahoma
4. Tennessee
5. Arkansas
1. Maine
2. Florida
3. West Virginia
4. Vermont
5. Montana
1. Florida
2. Colorado
3. New Hampshire
4. Utah
5. Wyoming
1. Hawaii
2. California
3. Connecticut
4. Minnesota
5. New York
1. Mississippi
2. Alabama
3. Oklahoma
4. Tennessee
5. Arkansas
1. Maine
2. Florida
3. West Virginia
4. Vermont
5. Montana
To identify the most retirement-friendly states, WalletHub compared the 50 states across 3 key dimensions—affordability, quality of life, and health care—with those featured here as Best overall topping the list. There were also subcategories of rankings, including the 3 highlighted here: highest life expectancy, lowest cost of living, and highest % of population 65+.**
This series of charts depicts a graphic of the U.S. map with the featured states in each list highlighted according to their rank 1–5.
The first chart features the Best overall states, and they're 1) Florida, 2) Colorado, 3) New Hampshire, 4) Utah, and 5) Wyoming.
The second chart highlights the states with the Highest life expectancy, which are 1) Hawaii, 2) California, 3) Connecticut, 4) Minnesota, and 5) New York.
The third chart features the states with the Lowest cost of living, and they're 1) Mississippi, 2) Arkansas, 3) Oklahoma, 4) Tennessee, and 5) Alabama.
The fourth chart highlights the states with the Highest percentage of the population over age 65, which are 1) Maine, 2) Florida, 3) West Virginia, 4) Vermont, and 5) Montana.
Once you've figured out what you want to do and where, if you're still working, you also need to decide on the when. An advisor can help you to figure out the finances, but there are a number of resources you can use to start working through the numbers.
Assuming you have or will have the money you'll need, here are couple of other things to consider in determining when to retire:
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 accelerate your saving.
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. You'll also want to discuss your plan with your spouse or partner to get their support.
As you and your partner plan for retirement, 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 how each of you are planning to spend your retirements.
It's important to get on the same page well before it's time to start that next chapter.
*Source: Retirement Confidence Survey 2020, Employee Benefit Research Institute (EBRI), April 2020.
**Source: Best states to retire, WalletHub, 2020.
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Working with Vanguard Personal Advisor Services gives you anytime access to advisors who are fiduciaries—always acting in your best interest. We’ll work with you to build a financial plan focused on what you want to achieve with your retirement.
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