When you envision retirement, I bet you are thinking about what it will feel like in that first year. That point in time when you will no longer be working, and have the freedom to build your days, weeks, and months to your own desires.
But what you also need to focus on is that your retirement could last 25 to 30 years or more. And the key to making sure you are financially secure for your entire retirement is to make sure that right at the start you are standing in your retirement truth.
Before you retire, I ask you to think through the long-term issues that will give you the most security possible for decades, not just year one.
- Inflation. The price of food, of your Medicare Part B premiums, of your rent, or property tax, all rise over time. Over a 25-year period if inflation averages 3% a year, what costs you $1,000 a month today will cost you more than $2,000. Will you have the income to cover the cost of inflation over the years?
- Social isolation. I know many of you are eager to stay in your current home through retirement. I know you love it. I know it may hold so many memories if it is where you raised a family, and where loved ones still gather. But is it easy for people to visit you, and for you to get out to visit them? If it’s a longish drive that entails a highway, are you confident an 80-year-old you, or 90-year-old you could get a taxi or rideshare to meet up with friends (and vice versa)? This is so very important to consider now. Social isolation is a retirement risk you want to plan ahead for.
- Home fit. If you need to climb multiple stairs to get into your home, and then fair a staircase inside the home, I need you to consider how that might become too demanding for a much older you. At a minimum, you should consider any interior renovation necessary to create a bedroom and bathroom on the entry-level of your home. You want to do that now, not after something happens later and you realize you can’t use the stairway for a while. Renovations take time. You should also consider where and how you might be able to create ramp access into your home.
If you are ready to seriously consider those retirement realities today, I think it will help you make smart decisions that will make your retirement more secure. Making a move today that reduces your living costs and makes it easier to stay socially connected will reduce not just your stress, but will also reduce the worry of your adult kids.