A recent WTOP article asked “Are you ready for 8,000 days or more in retirement?” The article notes that the years we spend in retirement are increasing, because we’re staying healthier and living longer. It’s not unlikely for those in their mid-60s today, to have a life expectancy of another 20 to 30 or more years.
Along with this good news come the issues and questions surrounding the transitions before and during retirement. As you near retirement, you may be pondering how you want to spend your days and if you’ll have the savings to live the life you want. Hopefully, if you have been planning, you have a good sense of your cash flow and assets available for retirement.
A complete financial plan addresses cash flow sources and a realistic living budget, as well as Social Security, Medicare, long term care, insurance, taxes and estate planning. It’s critical to envisioning your future retirement. Many professionals believe it’s important to incorporate both quantitative and qualitative planning to allow for a fulfilling retirement and a life well-lived.
At the MIT Age Lab, instead of looking at retirement as an end, they consider a new retirement story that lasts on average for 8,000 days. The MIT Age Lab divides a person’s life into four equal parts of 8,000 days. Each segment lasts approximately 22 years: Learning (birth through college); Growing (start of professional career, relationship/marriage, start young family from your 20s to mid-40s); Maturing (prime career years, bigger homes, raising older children from mid-40s to mid-60s); and Exploring (retirement beginning mid-60s).
In its studies, MIT found that most people only had a vague idea of what they would do in retirement. It is remarkable that many see retirement as a single state. MIT found that without a clear vision, many retirees are unprepared for what comes next. While you may know exactly what you plan to do on Day 1 of retirement, do any of us really have a clear vision of Day 4,000? Initially in retirement, most have resources, good health and time for leisure activities, travel and social connections, along with the desire to pursue new interests.
Individuals and couples also begin addressing crucial “tactical” decisions that include where to live, how you will get around and with whom you will spend your time. That includes planning where and with whom to retire, as well as how much it will cost.
Meet regularly with your attorney to be certain your long-term plan is intact, can accommodate any changes and is in harmony with your estate plan.
When it comes to retirement planning, many only look at accumulating assets and making sure we spend our money wisely. While many retirees are concerned with outliving their wealth, there’s an even greater risk of losing your independence to declining health, being unable to access things you enjoy or need and having fewer friends.
Reference: WTOP (May 9, 2018) “Are you ready for 8,000 days or more in retirement?”