5 Questions to Ask Yourself 5 Years Before You Retire ...

By: Reesa Manning written on August 26, 2011

The first step in any retirement income plan is to envision your retirement and make some decisions about how you will live.

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Where will you live?

  • Proximity to children and grandchildren.
  • Affordability.? Key factors in assessing a location?s living costs are the price of housing, the cost of food, utilities, and transportation, as well as taxes (state income tax, property tax, and sales tax).
  • Employment and business opportunities.? This factor is often contrary to affordability:? the towns with the lowest cost of living generally have the most limited employment and business opportunities.
  • Travel plans.? If travel is expected to play a big part in your retirement plans, you might opt for an inexpensive condo near the airport (with no plants or pets), at least until the wanderlust subsides.
  • General preferences.? These include climate, cultural and recreational opportunities, access to medical care, and other lifestyle issues.

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What will you do?

One way to look at this is to ask if your anticipated activities will add to the expense side or the income side of your retirement budget.

  • Expense-generating activities.? The classic life of leisure can be expensive!? Unless you plan to spend your days reading, walking, and visiting with friends, you may be facing higher-than-anticipated costs for travel, hobbies, and entertainment.
  • Income-generating activities.? Like to work ? why not make that one of your primary activities during retirement?? Even volunteer work pays off if it keeps us from engaging in expensive activities.

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How well will you live?

Living well is in the mind of the beholder.

  • The simple life.? Grow your own vegetables.? Prepare meals at home.? Take long walks.? Read good books.? You can do a lot with a little.? Whether it arises from lifestyle choice or financial need, the simple life holds appeal for many.
  • The high life.? On the other hand, some retirees who have been chained to an office for several decades may see retirement as their chance to live it up.? Backed by a healthy retirement account and the income to support their chosen lifestyle, they may eat out more, take more vacations, explore expensive hobbies, and generally live their dream.

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How long do you expect to live?

This is the million-dollar question that, if answerable, would make retirement planning so much easier.? The safe route is to plan for retirement income to last to age 95 or 100.? If you?re afraid that will cause you to leave too much on the table, you can visit the life expectancy calculator at www.livingto100.com to get a more accurate idea of how long you might live.

What surprises does life hold in store?

  • Your health.? Your genes, your health history, and your lifestyle may provide some clues as to how your health will hold up as you grow older, but this is always a wild card in retirement planning.? Ironically, the healthier you are, the more likely you are to need long-term care later in life.
  • Your family.? You never know when a family member might need your help.? If your parents are still living, one or both might need personal or financial support as they age.? And your children aren?t immune to life?s surprises either.
  • The economy.? Some say the financial crisis of 2008 was predictable; others say they never saw it coming.? The lesson that came out of it is that anything can happen, including events beyond our wildest imagination.? Adaptability is the key to managing life and money in the 21st Century.
  • Disasters.? Does it seem there have been more, and greater, disasters in recent years?? Flooding, earthquakes, tsunamis?what?s next?? Get your insurance paid up, your disaster kit ready, and hope for the best.

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The bottom line is that whether you are still working or already retired, you now need more than ever to have a sound financial plan to cover your retirement income needs.

Reesa Manning is a Senior Financial Advisor at Integrated Wealth Management.? For more information, call Reesa at (760)834-7200, or reesa@IWMgmt.com.

See full Bio: Reesa Manning

Integrated Wealth Management is a Registered Investment Adviser.

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Source: http://www.iwmgmt.com/articles/5-questions-to-ask-yourself-5-years-before-you-retire%E2%80%A6%E2%80%A6

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