Fong Law Group

Make Sure Your Retirement Is About Having Fun

“We spend decades dreaming of the day when life won’t be dictated by alarm clocks, commute times, meeting schedules and office politics. Then reality sets in: Retirement can be kind of a drag. There may be 20-plus years of it ahead of you.”

What? How can retirement be a drag? You’re not going to the office every day, subjected to the personalities and pitfalls of office politics. The first month is glorious, then it sets in: you’re on your own now. No schedule, no one telling you what to do. The lack of structure isn’t for everyone, says Next Avenue in the article “How to Keep Retirement From Being A Drag.”

The simple fact is, most people plan for the financial and legal aspects of retirement: how much they need to save, how much of a bite inflation will take, the cost of healthcare, long-term healthcare, etc. However, most people neglect to think about the emotional impact of retirement.

Work is where many people get their sense of purpose and their identity. Talk to any working parent who steps out of their career trajectory for a few years. It’s a similar shift, except there is no smiling cooing baby to keep you busy. If you don’t have projects, meetings, or deadlines, or the community of the workplace, what defines you?

This sense of being adrift occurs to people regardless of their income level and may be even more intense for successful people who are used to running a business, commandeering a company or managing a busy desk.

Here are some suggestions for making sure your life during retirement is enjoyable and has purpose and meaning.

Set your alarm and have a reason to get up every day. After you’ve taken the big trip, spent time with your grandchildren and organized your closets, what’s next? It’s time for you now, time to do things that you’ve always wanted to but for reasons of time, could not. That might mean taking up a sport, expanding a hobby, becoming an active volunteer or returning to school to explore a subject you love?

Consider yourself to be on a fixed salary. The transition from paycheck to drawing down savings can be unnerving. You’re sitting on a huge pile of money—but it must last two or even three decades. Create a post-retirement budget before you retire and don’t forget to include healthcare, taxes and potential emergencies. Also consider which assets to draw from and in what order. Do you use your 401(k) funds first, or start with cash? Avoid this retirement rookie mistake: taking out too much cash in the initial stage of retirement.

Talk with your partner and family. Will you both retire at the same time? If one is still working and the other is not, how will you divide up chores? If your work schedules meant you didn’t see each other for more than a few minutes during the week, spending 24/7 together is a big change. Do you expect to spend all your time together, or will there be some “me” time? Will your children expect you to babysit on a regular basis?

Moving into the retirement years is a big change in life, and the more prepared you are, both in terms of having an estate plan, retirement funds and a plan for your time, the more fulfilling and enjoyable your retirement will be.

Reference: Next Avenue (Nov. 29, 2018) “How to Keep Retirement From Being A Drag”

Fiscal Words of Wisdom from One Who’s Been There, Done That

“There is no doubt that, for the most part, parents are much more involved with their children and their children’s more numerous activities, than parents were when I was growing up.”

If this describes you and your kids, then you need to prepare yourself for the adjustments that happen when the last child leaves the house. It can be emotionally and financially challenging, according to the Daily Messenger in the article “John Ninfo: Some advice for empty nesters”

With one less person in the household, it’s time to re-adjust your budget. Many of your everyday expenses, such as electricity, food and gas, will likely be lower. However, you may have new expenses related to your new life. You may spend more on activities that were put off until the kids grew up or find yourself dining out more often. Go slow when it comes to spending money on pricey vacations or fancy dinners. You want to strike a balance between enjoying your new-found freedom and cash flow, as well as keeping retirement savings in mind.

Assuming your cash flow is easier now, it’s time to commit to paying down outstanding debts, especially credit card debt. Reduce any interest or finance charges that you can. You might even think about paying down your mortgage or paying off a high-interest car loan. If you’ve taken on student loans or a home equity loan, now is the time to try to knock those down. At the same time, try to minimize any new spending or borrowing.

Take another look at how your retirement saving is progressing. Will you have enough at your current rate of spending, or should you ramp up your efforts, if you have room in your budget?

Have you thought about downsizing, or decluttering? Even if you are not planning on moving, your home may be filled with things you don’t need or want anymore. Set some time aside to clear out what you don’t need, donate what you can to a local charity or start planning yard sales. You don’t have to tackle this project all at once.  It is possible to donate a few hours each weekend to the task.

When was the last time you updated your will and other estate planning documents? Now is the time to revisit these matters, as well as looking at any long-term care insurance. If you don’t have a long-term policy in place, this is the time to buy it—if you can.

Are you finding yourself with a lot of free time? We don’t often ask ourselves the important questions, like “What matters to me?” and “How do I want to be remembered?” Many people find the answers to those questions in service to others. If you’re not already volunteering with an organization, find the ones that resonate with your values and get involved.

Don’t immediately start on expensive home renovations or decorations. Give yourself time to adjust to a quieter house and think about where you want to invest those resources before spending. A redecorating project is fun but may be making yourself busy and filling time. The project may not actually be affordable.

The empty nest presents many new opportunities for a fresh start. Use them wisely.

Reference: Daily Messenger (August 26, 2018) “John Ninfo: Some advice for empty nesters”

You Can Age in Place but You Need to Plan

“Many homeowners plan to stay in their homes over the long-term, and some may plan to live independently at home, rather than moving into a retirement community, if possible.”

Aging in place is what most people hope for as they enter their 60s and 70s.  However, to make it a reality, there is a need to plan, according to the article “BBB On Homes: Focus on several things when aging in place,” from LMTonline.com. The Centers for Disease Control and Prevention define aging in place, as the ability to live in one’s own home and community safely, independently and comfortably regardless of age, income or ability level.

Changes in health or finances don’t always allow this to happen. Here are four things to keep in mind, when considering whether you or a parent will be able to remain at home:

Safety updates. This generally includes a walk-in shower, safety rails, widened doorways that can accommodate wheelchairs, non-slip flooring, ramps and accessible kitchen drawers and food preparation surfaces.

Getting food and supplies. Food and medication deliveries are crucial to aging in place. What will happen, if you are no longer able to drive? If you depend on local stores for delivery and there is a major weather event, how will you manage? There are some non-profits who deliver but people must be open to the idea of receiving help from others.

Preparing for disasters and emergencies. Living alone makes it difficult to get help immediately after an accident. When time is of the essence, it can be difficult. There are many options, including medical alert systems and home surveillance cameras. However, the person has to be willing to have them. Arranging for a friend or family member to check in daily is good for every day safety.  However, it will not help in an emergency.

You’ll need health care and transportation. If you live in a city or suburb where there is public transportation, you’ll be able to get to your doctor’s appointments. If not, you’ll need to budget for taxi services.

Budgeting. Living on your own means more independence and privacy. It may cost more because certain fixed costs can only be reduced so far.

If you are considering how to remain at home, make sure to speak with family members, so they are aware of what your wishes are. With their support and if you are financially able to do so, it may make a big difference in the quality of your life.

Reference: LMTonline.com (Aug. 26, 2018) “BBB On Homes: Focus on several things when aging in place”