When helping clients and their families make the transition to retirement or work optional years, I have discovered that there are four key pillars to a happy and successful retirement:
- Health
- Relationships
- Reliable and Consistent Income
- Retirement Road Map
Key Takeaways: The Four Pillars to a Successful and Happy Retirement
Health
Physical and mental health are key to a long and happy life. Almost everyone I know who is retired takes their health very seriously, and has a plan for the following two areas:
- Physical Health: During a 20 to 30 years plus retirement, to be able to do the things you wish to do, you must stay fit. This not only involves a plan to stay active but also a diet plan.
- Mental Health: Maintaining mental health is crucial during retirement to maintain and keep your independence as you age.
The Active Years:
The first 10 to15 years of retirement are what I call the “active years” and you will want to do the things that require physical health. Activities such as travel, hiking, skiing, or really anything that requires you to move around.
Relationships
The key to a long and happy retirement is your relationship as follows:
- People: Once you stop working, you must have a plan with whom you are going to spend your time. The most successful retirees I know have done this well. They have a network of friends, family, and community organizations, and spend time making new friends to do the activities they enjoy.
- Places: Coming up to retirement and during retirement, you must determine where you are going to spend your time. This would include where you plan to live, your travel and vacation home plans, and an eldercare real estate strategy as you age.
- Pursuits: On average people spend 2,000 hours a year working, and once you stop you must replace that time with something. Successful retirees have a plan to replace the time spent at work with activities such as community involvement, travel, family time, sports, physical activities, volunteering and hobbies.
Reliable and Consistent Income
Since many retirees can expect to live 20 to 30 years or longer in retirement, creating a lifelong income and cash flow plan is not only critical but crucial.
This strategy must be developed from the financial assets they have accumulated over their lifetime to create a retirement cash flow process.
If you have a decumulation strategy in place, knowing that you will not outlive your income, it helps to remove some of your financial stress. It allows you to live your life and navigate the inevitable ups and downs of your life and the investment markets easier.
Retirement Road Map
A Retirement Road Map is important to help you make financial decisions as it will help to align your sources of capital with what is important to you.
With a strategy in place, whatever happens in the markets, the world, the economy, or your life, you will have a basis to be able to make adjustments.
To align your sources of capital with what is important to you, and what your family wishes to accomplish, your Retirement Road Map should outline your strategy in the following five key areas.
- Retirement Income Planning – creating lifelong income
- Investment Management – smart investment strategies
- Smart Tax Strategies – reduces the tax you pay today and in the future
- Estate Planning – efficient transfer to the next generation
- Risk Management – ongoing review of risks to your strategy
To create your Retirement Road Map, you can either do the research and do it yourself or hire a Certified Financial Planner (CFP®) as a guide to your changing landscape during retirement.
Ongoing Review
Throughout retirement you will want to review and update your strategy in the four pillars:
- Health
- Relationships
- Reliable and Consistent Income
- Retirement Road Map
Some books that may help you with your planning are:
The Four Phases of Retirement: What to Expect When You’re Retiring
Values Based Financial Planning
Retirement Planning is an ongoing process, not an event, and all four pillars must be reviewed and adjusted annually.
For more information, you can refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®
For your FREE Copy CLICK HERE
For your free retirement readiness assessment CLICK HERE
Buy Preserving Wealth CLICK HERE
Jack Lumsden, MBA, CFP® Financial Advisor, Assante Financial Management Ltd.
This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.
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