Four Simple Steps To Ensure A Successful Retirement

You’ve done all the saving and planning necessary to enter the next stage of your life. Great! But don't stop there. Here are some very simple, yet effective tips to make sure that your transition from working to non-working life goes smoothly.

To the extent possible, in retirement, it’s helpful to mirror how you were getting paid. If you were receiving a paycheck twice a month (like on 1st and 15th), work with your IRA provider and set up a direct deposit withdrawal on those dates. Social Security may be a second “paycheck,” and that is deposited depending on which day of the month you were born. For example, if you were born between the 1st and 10th, your Social Security check would be deposited on the second Wednesday of the month.

And don’t forget about taxes. You should work with your financial planner or tax advisor to figure out how much federal and state taxes should be withheld from each retirement plan withdrawal. Wisconsin does not tax Social Security, but depending on your overall income, it may be subject to Federal tax.

Perhaps the biggest anxiety that retirees face is coming up with the money to pay for larger-ticket needs that arise unexpectedly – and are most often related to your home. Creating a home maintenance/improvement budget based on your home’s value will go a long way toward alleviating this stress. Plan for around 3% of your home’s value each year. So, if you have a $300,000 house, you would divert $9,000 a year, or $750 a month, from your checking account to a savings or money market account. (This transfer can be done automatically.) You might not use this money every year, but you’ll be very happy you have it when the need inevitably arises.

Too often, retirement planning only focuses on the financial side of life. Think about what your pre-retirement job provides you other than a paycheck. For many, it’s structure and social interaction. You might think that not having to go to work sounds like a dream, but a lot of people can lose their sense of purpose, becoming lonely and isolated, in their retirement years. Setting up a weekly coffee date or golf game with friends is something simple that you can do to ensure that sure you always have something to look forward to.

Parents often lecture their kids about being glued to their phones. Retirees may want to be cognizant of how much time they’re spending watching the “old-fashioned” screen, the television. With more downtime and a 24-hour news cycle, it’s easy to get caught up in all the noise. Programming that is advertised as news is really entertainment, and most often focused on the negative. It is hard not to be convinced the world is coming to an end if you spend too much time watching and listening to people who are telling you so. This has practical application to your investments as well. Time-tested buy-and-hold strategies are threatened when you can always find someone who’ll tell you that the market is crashing. This can cause poorly timed investment decisions that can have damaging long-term effects.

To discuss your retirement options and develop a plan for post-working success, please contact our Wealth Management group today.