By Scott Hamilton, CFP®
Have you ever pictured your ideal retirement? For some, it means staying close to family and friends, while for others, it’s traveling the globe or settling somewhere warm and sunny. Many retirees also find fulfillment in volunteering or picking up a new passion.
But envisioning retirement is just the first step—understanding how to fund that lifestyle is equally important. Imagine having a clear road map to guide your financial decisions and bring your retirement dreams to life. This article will help you start that journey by prompting key questions that clarify what your ideal retirement looks like and how to plan for it in a way that fits your unique goals.
Table of Contents
What’s Your Ideal Retirement Date?
Many of us desire the flexibility that comes with retirement, whether that means retiring early or lightening your workload little by little so you can invest your time and energy into what’s most important. Your age (now and in retirement) is one of the most significant factors to consider when planning for your future. If you want to retire early, you’ll need to make sure your investments are set up to start withdrawals without sacrificing growth. You’ll also want to run a variety of scenarios with different market timing to determine the best strategies to maximize your wealth.
What Do You Want Your Retirement Life to Look Like?
Have you thought about the type of lifestyle you want to have in retirement? If you know you want to travel, play golf, or spend time with your grandkids, you need to factor in what that looks like, how much it will cost, and how you’ll make it happen.
For example, if you plan to travel, you’ll need to consider:
- Will you be traveling stateside or internationally?
- How often do you want to travel?
- How would you like to get there? (e.g., car or RV; first class on a plane or your own plane)
- Where would you like to stay? (e.g., 5-star hotel, Airbnb, with family members)
- Will you be traveling with your family? Would you like to cover their expenses too?
- Will you maintain your primary residence? If so, who will watch your house and maintain it while you’re gone?
Even if your dream is simply to spend time with your grandkids, you’ll still need to think through your expectations. To some people, “spending time with grandkids” means babysitting a few times a week. To others, it means footing the bill for all-expenses-paid trips to various destinations of their choosing. Whatever it is you want to do with your time, map out the details so you can have a clear picture of how much you need to allocate to make it a reality.
Will You Earn an Income in Retirement?
Although you won’t need to work during your retirement, it’s a great way to stay active, keep your mind sharp, and maintain a sense of purpose—and maybe even help you live longer. Some retirees choose to build a second career around things they are passionate about. No matter what you do, if you plan to work during retirement, you’ll have more resources to afford even greater financial flexibility.
What Kind of Healthcare Coverage Do You Expect to Have?
Right now, you most likely have health insurance. When you stop working, you’ll need to secure healthcare coverage another way. You may be able to utilize your spouse’s plan if he or she is still working. Or you can get coverage through the healthcare marketplace. You qualify for Medicare starting at age 65, but even then, you may want additional coverage to pay for prescription drugs, dental care, eye exams, and other expenses.
Retirees sometimes fail to fully plan for expenses during the later stages of retirement, and medical care often tops the list. It’s estimated that retirees will use 15% of their income for health expenses, and the average retired couple could see healthcare expenses of approximately $413,000 (after tax) after age 65. Don’t let this be a planning oversight that prevents you from retiring comfortably!
Will You Have Any Dependents?
Your kids may be grown and out of the house by the time you retire, but that doesn’t necessarily mean you’ll stop supporting them financially. According to a recent study, about half of parents still give financial support to their adult children.
And even if you aren’t helping your kids out with daily expenses, you may want to contribute to their weddings, down payments on homes, or tuition for your grandkids.
Will You Leave an Inheritance for Your Family?
Most people want to leave a financial legacy for those they leave behind, but if you plan to pass your wealth to your children and grandchildren, it’s important to make the transition as smooth as possible with a comprehensive estate and legacy plan. Be sure to consider what kind of legacy you want to pass down. Legacy planning allows you to incorporate family or financial values into your wealth transfer. If your children aren’t as adept at money management or have made financial mistakes in the past, your legacy planning can help guide them through what to do with their new wealth. Finally, legacy planning may help protect your grandchildren and encourage generational wealth-building for decades to come.
What Is Your Charitable Giving Plan?
Do you want to continue your generosity when you’re retired? What will that look like? Whether it involves setting up a foundation or leaving assets for charities in your will, a smart charitable giving plan can help ensure you continue to support the causes you care about. There’s no lack of options when it comes to giving, so be sure to explore donor-advised funds, qualified charitable distributions, or charitable remainder trusts to not only bless others but also possibly minimize your taxes and maximize your gift.
How We Help You Plan for Your Lifestyle in Retirement
Planning how to support your desired lifestyle in retirement isn’t a one-size-fits-all process. It requires a comprehensive perspective that considers your financial situation, personal goals, and family circumstances.
A good starting point is identifying your retirement priorities. From there, it’s smart to evaluate strategies for managing risk, optimizing your portfolio, and allocating assets in a way that aligns with your long-term objectives. Taking a measured, long-term approach helps you navigate market fluctuations and economic changes with confidence.
At Hamilton Financial Planning, LLC, our mission is to simplify financial management while keeping your unique needs front and center. We aim to empower you to make confident financial decisions and enjoy a stable lifestyle in retirement. And as fee-only, fiduciary advisors, you can rest easy knowing that we put your best interests first at all times.
Schedule a complimentary get-acquainted meeting online or reach out to us at 512-261-0808 or scott@hamiltonfinancialplanning.com to explore how we can help you strike the right balance.
About Scott
Scott Hamilton is founder and chief financial officer at Hamilton Financial Planning, a wealth management firm that specializes in providing comprehensive financial planning for retirees. With over 20 years of experience in the financial industry, and having completed over 250 financial plans for retirees across all industries, but mostly the oil and gas industry, Scott is passionate about providing his clients with the tools and insight they need to achieve their financial goals. He has a Bachelor of Business Administration in finance from Texas State University and an MBA in international finance from Pepperdine University. Scott has also been happily married to his wife, Gayle, for over 25 years. To learn more about Scott, connect with him on LinkedIn.
