Retirement Ready: Budgeting, Relocating, and Leaving a Legacy

---

1. Planning your retirement income 

Before you blow out the candles at your retirement party, you’d better check over your finances. Hopefully, you have a nice balance in a retirement account and/or pension plan. And if you set up other income streams during your working years, such as an annuity or rental property, that’s terrific!

As you consider your retirement budget, you’ll need to answer two big questions:

• When do you plan to begin drawing Social Security? You can begin receiving payments as of age 62, but your full benefit will be reduced—up to 30%—versus waiting until your full retirement age (67 for anyone born in 1960 or later). And if you wait beyond your full retirement age, you’ll receive an even higher benefit.
• How much can you draw from your retirement accounts each year? There are many factors that go into the drawdown decision, but you might start with the 4% rule, and then consider a few alternative retirement drawdown strategies. 

One of the greatest fears among retirees is that they’ll outlive their money. That’s called longevity risk, and although the threat is real, there are steps you can take to minimize it.

2. Setting the budget and living your early retirement years

Once upon a time, financial pros would tell early retirees that they would need 70% to 80% of their pre-retirement income to cover expenses in retirement. But those are the old rules, and they may or may not apply to you, depending on:

• Whether you plan to work during your “second act”
• How much you plan to travel
• Whether you’ll downsize your housing and perhaps buy property in another state (or country)

Some retirees end up needing more than 100% of their pre-retirement income. They eat out more, travel more, spend more on grandchildren and other family members, and don’t scale back their wardrobe and other work-related expenses as much as anticipated.

3. Navigating the next phase of retirement

No matter how far along you are into your retirement years, it seems there are always more decisions to make. For example, you might stay in your home initially, or move to a 55-plus community. You might consider a continuing care retirement community (CCRC), aka life plan community, to help you transition to a higher level of care should you need it later in life. 

And finally, what do you want your legacy to be? Your estate plan is part of it, but it’s also the impact you’ve made on the world around you. It’s important to communicate, share the family history, and let your intentions be known clearly and openly. No one wants their lasting legacy to be fights, hurt feelings, and a lack of closure.