Navigating your retirement transition is filled with possibilities and uncertainties. Whether you’re living in retirement or on the cusp of leaving the workforce, mastering the fundamentals of retirement planning can transform vague dreams into a secure, fulfilling reality.
In this guide, we’ll explore essential principles to help everyone build a plan that’s resilient, personalized, and adaptable to life’s twists.
Retirement Planning Principles for Everyone
1. Imagine your Life in Retirement
As an advisor, I do my best to help people with this part of their plan. But frankly, this isn’t a topic that is easily solved with an advisor, so you’ll need to make it a priority to visualize what you want your life in retirement to look like.
And by this, I don’t mean surface level goals such as annual vacations, house remodeling, etc. It’s the day-to-day activities that you should focus on.
You have an extra 8-10 hours a day once you stop working. Where can you get yourself into a “flow state,” as well as find social and physical activity.
2. Get Organized
To get organized you need to list everything you own, everything you owe (debt), where those are located, and all the people important to your financial life.
Don’t overlook this step. Every other idea on this list is too hard to do getting organized.
The families I serve love creating their household treasure map.
3. Understand the Key Assumptions in your Retirement Plan
When it comes to planning, you’re going to have to make some guesses about the future. Yes, I know the idea of guesses sounds crazy. However, you can never lose sight that the future is unknowable.
When making guesses, you should just go nilly willy throwing out ideas. Instead, you should use statistics and history as a guide to your guesses.
Here are a few important assumptions you need to be mindful about:
- How long will you live?
- What will your growth and inflation rate be in retirement?
- What are your expenses?
- What are your sources of income?
- What surprises does life hold?
4. Develop your Retirement Portfolio
You only have one shot at retirement. To be successful you need to choose an investment process that you can treat like a traditional wedding vow – “until death do us part.”
The best investment strategy is the one you can stick to through the good days and the bad.
Read my essay – The Retirement Portfolio to get my take on the topic.
5. Choose your Portfolio Withdrawal Strategy
When it comes to living off your assets, you must create a plan to convert it into an income stream. A few popular ways include living off interest and dividends, the “4%” rule, and Retirement Guardrails. Each has its own trade-off and variation.
At Calculated Wealth, we recommend Retirement Guardrails because it allows you to spend more early in retirement, adapts to your life, and sets expectations of what happens in extreme market environments.
The other strategies are fine, but they come with significantly more trade-offs. Are you OK with those trade-offs?
6. Adjust as Life Changes
Review your plan regularly, adapting for new needs, market changes, or family shifts. Never lose sight that the future is unknowable.
Your Wealth Partner
Retirement planning is an ongoing journey, not a one-time event—anchored in thoughtful self-reflection, informed assumptions, and adaptable strategies that grow with you. By envisioning your ideal daily life, staying organized, and choosing a portfolio and withdrawal approach you can commit to through every season, you’ll be better prepared to face life’s uncertainties with confidence. While the future is unpredictable, a well-crafted plan puts you in control.
At Calculated Wealth, we partner with families to navigate this important chapter with personalized guidance and support. Curious about how we can help you create a resilient retirement plan? Contact us today for a complimentary introductory call.
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