Preparing for Your Retirement
When you think about your retirement, what do you see? The possibilities are as unique as you are. Many people who are getting closer to retirement can look forward to healthier and longer lives than their parents. With age 60 now considered the "new 40," today's retirees are becoming the first generation to navigate a new life stage between middle adulthood and true old age.
How will you prepare for this new stage in life? It's important to make the most of the possibilities while still preparing for unforeseen challenges.
Even if you've been saving for retirement for decades, you may not have thought much about what your actual retirement would be like. As your retirement draws closer, it's time to start preparing for the transition. Here are three places to start:
Create a vision for your retirement: The sooner you bring your retirement into focus, the greater your chances for realizing the retirement you want.
- Review your plan: Make sure your vision of retirement is in line with the resources you have to fund it. Now is the time to ensure that your nest egg and withdrawal strategy are aligned with your goals.
- Prepare for contingencies: With retirement lasting 30 or even 40 years, it's important to regularly assess your progress and make adjustments when circumstances change.
Create a vision for your retirement
To help you take stock of what your ideal retirement looks like, consider these questions:
- What do you want to do in retirement?
- What is most important to you?
- Who do you want to spend time with?
- Where do you want to live?
- Would you like to continue working in retirement, whether it's a part-time job, a second career or your own business?
- How do see yourself supporting family members (parents, children, siblings) in the future?
- How will you balance your travel or entertainment needs with other expenses like food, housing, and health care?
After you explore your dreams and envision your ideal retirement, determine if your goals are in line with your savings.
Review your plan
An effective retirement plan based on a complete understanding of your goals and how they align with your retirement savings can better prepare you to live the retirement lifestyle you desire. Here are a few tips to help you with your plan for retirement:
Organize your resources
- By the time you retire, it's easy to have a number of retirement accounts at former employers and across multiple financial institutions. It may make sense to consolidate your retirement savings with one provider to ensure your investment plan is coordinated, make it easier to track your savings, and to take advantage of reduced fees.
Get serious about your retirement paycheck
- Refine your plan for how you will generate a reliable income stream from your savings and other resources.
- At this point, you will want to carefully determine the expenses you will need to cover and how and when you will withdraw money from your nest egg.
- For detailed steps on how to begin creating your retirement paycheck, take a look at our Manage Your Income page.
Plan for contingenciesRetirement often brings unique challenges and opportunities. When you experience the unexpected, it helps to have your finances and financial documents in order. Do you need – or have – the following financial tools in place?
- An up-to-date will (in some states, it may also be necessary to set up a trust)
- Appropriate updated beneficiary designations on insurance policies and retirement accounts – these designations take precedence over wills
- A financial safety net to care for a surviving spouse or partner – in many cases, pension and Social Security payments are reduced when one partner dies while expenses remain about the same.
- Durable powers of attorney created for your finances and health care – these documents ensure that someone you know and trust is appointed to make decisions for you when you are unable to do so
- Trusts established if you want to address special issues like blended families, caring for family members with special needs, or charitable giving
Need help creating or reviewing any of these financial safeguards? Your attorney can work with you to make sure your affairs are set up according to your guidelines.
It can be a challenge to make your money last for a lifetime and be prepared for unexpected financial situations in retirement. However, you don't have to face it alone. Talk with a Wells Fargo Funds Investment Specialist at 1-800-359-3379 about how you can make the most of your money in retirement and build a financially secure future.