Retirement Life Planning

For many people, retirement is a significant milestone marking the end of one life chapter and the beginning of the next.

Indeed, many people understand the importance of financial readiness for a successful retirement. Yet they’re less likely to address the non-financial aspects of retirement or develop a plan for how they’ll handle them once they stop working.

Retirement life planning complements financial planning in that it goes beyond the numbers and focuses on creating a purposeful and fulfilling life on the other side of your working years. In this blog article, we’ll take you through a step-by-step process for defining your vision and lifestyle goals in retirement, so you can continue to thrive throughout your golden years.

Why Does Retirement Life Planning Matter?

Retirement life planning is about envisioning your life after work and mapping out the activities, pursuits, and goals that will bring you joy and fulfillment. It acknowledges that retirement is not just the absence of work but an opportunity for personal growth and finding a true sense of purpose in life.

It also provides the opportunity to explore your passions, maintain social connections, and prioritize your physical and mental well-being in your later years—all of which are important for living a long, healthy life. In fact, studies have shown that having clearly defined goals, nurturing close relationships, and staying physically active throughout your golden years can have a greater impact on your life expectancy than DNA alone.

Ultimately, retirement life planning is vital to ensure a smooth and satisfying transition into retirement. By envisioning your ideal retirement today, you can develop a step-by-step plan for turning your vision into reality.

What Does Retirement Life Planning Entail?

While retirement life planning is unique to everyone, there are certain broad categories that can help you envision your ideal retirement and develop a plan to achieve it. These categories include:

  • Lifestyle goals. What do you want to experience in retirement, and how do you plan to spend your days?
  • Personal growth. How will you continue to learn and challenge yourself once you stop working?
  • Contribution. What can you do to give back to society, your community, or loved ones and develop a true sense of purpose in retirement?
  • Social connections. How will you actively nurture your relationships in retirement once your workplace social network is no longer present?
  • Health and well-being. What can you do to support your physical and mental health and well-being in retirement?

Each of these categories can help you develop a personalized and fulfilling retirement life plan. Next, we’ll explore each one in more detail and provide tips and strategies for incorporating these considerations into your retirement plan.

#1: Lifestyle Goals

For many, retirement is a major life transition that brings about changes to your routine, role, and identity. By defining your lifestyle goals, you can gain clarity on how you’ll spend your time in the next phase of life, so the transition feels less abrupt.

First, think about the activities and pursuits that align most closely with your values, interests, and goals. Examples include:

  • Traveling and exploring new parts of the world
  • Pursuing hobbies and interests
  • Nurturing relationships
  • Finding work and purpose  

If you’re coming up blank during this step of the retirement life planning process, consider taking a free Personal Values Assessment. This can help you identify what’s most important to you, so you can shape your retirement accordingly.

Next, make a list of everything you’d like to experience and accomplish in retirement, and don’t be afraid to dream big. Your lifestyle goals will influence many aspects of your retirement plan, including your financial needs and readiness.

Retirement Life Planning: Lifestyle Goals

#2: Personal Growth

Retirement presents an ideal opportunity for personal growth and self-discovery. By stepping out of your comfort zone, trying new things, and taking on challenges, you can expand your horizons, discover hidden talents, and explore new aspects of yourself.

Challenging yourself to grow and evolve throughout retirement is vital for your personal development, ongoing fulfillment, and overall well-being. In fact, research suggests that engaging in cognitively demanding, novel activities in older adulthood can enhance brain and memory function more than social activities alone.

As you engage in retirement life planning, consider setting goals for yourself like pursuing a new hobby, writing a novel, or learning a foreign language. This can help keep you mentally sharp and maintain your sense of identity in retirement, contributing to your overall quality of life.

Retirement Life Planning: Personal Growth

#3: Contribution

Another important aspect of retirement life planning is contribution. Consider the ways you want to give back once you stop working.

Common examples include:

  • Volunteer work. By contributing to charitable causes, supporting environmental initiatives, or advocating for social justice, you can help address societal challenges and create a better future for generations to come.
  • Mentorship. Retirees tend to have a wealth of knowledge, skills, and life experiences that can benefit others. By sharing your wisdom through mentoring, teaching, or consulting, you can pass on your expertise to younger generations or individuals in need.
  • Community involvement. By supporting the causes close to your heart, you can contribute to their advancement while finding a renewed sense of purpose, which many people lose once they stop working.

Ultimately, contribution allows you to make a positive impact on the world around you while fostering social connections, establishing new relationships, and creating a sense of belonging.

Retirement Life Planning: Contribution

#4: Social Connections

In retirement, when the traditional social network of the workplace may no longer be present, maintaining strong social connections becomes even more vital. Humans are inherently social, and meaningful relationships provide a sense of belonging while contributing to overall happiness and well-being.

As you continue the retirement life planning process, consider how you’ll nurture and cultivate relationships with family, friends, and your community in retirement. Examples may include:

  • Joining a community center
  • Participating in social activities that align with your interests and passions—for example, a book club, art class, or adult sports league
  • Volunteering at a local charity or joining the board of a nonprofit organization
  • Establishing a standing date with friends or family to visit and reconnect

By actively seeking opportunities to connect with others, you can develop a support system that offers guidance, encouragement, and motivation throughout retirement.

Retirement Life Planning: Social Connections

#5: Health and Well-Being

Lastly, retirement life planning involves developing a strategy for maintaining a healthy lifestyle throughout your golden years. Not only will this make retirement more enjoyable and improve your quality of life, but it can also help minimize your healthcare expenses, potentially preserving your financial resources longer.

The following factors can all contribute to a healthy lifestyle in retirement:

  • Regular physical activity. Aim for at least 150 minutes of moderate-intensity aerobic exercise per week for cardiovascular health and mix in strength training exercises to maintain muscle mass and bone density.
  • Balanced nutrition. To improve longevity and boost your energy levels, include a variety of fruits, vegetables, whole grains, lean proteins, and healthy fats in your meals and limit your consumption of processed foods, sugary beverages, and unhealthy fats.
  • Mental stimulation. Keep your mind active and engaged by reading, solving puzzles, or learning a new skill. Engaging in activities that challenge your cognitive abilities can help maintain mental acuity, memory, and overall brain health.
  • Sleep hygiene. Establish a bedtime routine, create a comfortable sleep environment, and practice relaxation techniques to promote restful sleep.
  • Stress management. Implement stress management techniques such as meditation, deep breathing, or exercise to maintain healthy stress levels in retirement and support your emotional well-being.

No matter how you choose to maintain your sense of well-being, engaging in activities that support your mental, emotional, and physical health is essential for a productive and fulfilling retirement.

Retirement Life Planning: Health and Well-Being

Mapping Out Your Life Plan

Once you’ve addressed the above aspects of your retirement life plan, you can begin to add structure and specificity to your goals.

For example, you can identify clubs and organizations in your community that align with your interests and welcome retirees. Or if one of your goals is to pursue a new hobby, you can find local resources or people with similar interests to support your journey.

In addition, your retirement life planning efforts can inform your financial plan, since you’ll have a better idea of how you’ll spend your time in retirement, as well as the associated costs. This can be helpful from a variety of perspectives, including:

  • Budgeting, and making sure your financial resources can support your lifestyle goals.
  • Healthcare expenses, and the potential cost savings of maintaining a healthy lifestyle in retirement.
  • Savings goals, as you should continually monitor and adjust your retirement savings strategy to align with your retirement life plan.

A fee-only financial planner can help you develop a comprehensive retirement plan that addresses these factors, as well as your financial needs and goals.

Satori Wealth Management Can Help You Transition Confidently into Retirement

Retirement life planning allows you to proactively shape your post-work years, ensuring a fulfilling and purposeful transition into the next phase of life. Without a well-thought-out plan, you may ultimately face challenges like boredom, a lack of direction, or even financial instability in retirement.

Satori Wealth Management can help you address both the financial and life planning aspects of retirement. As a Registered Life Planner (RLP®), we have the necessary skills and training to help you develop a more nuanced and comprehensive retirement plan that considers your financial and lifestyle goals.

To begin your retirement planning journey and learn more about how we can help, please start by scheduling a free RetireNow™ Checkup.

Relocating in Retirement

Relocating in retirement can be a fantastic way to live out your dreams, experience a change of scenery, or simply enjoy a lower cost of living in your golden years. In fact, more than 234,000 Americans retired to a new location in 2022—a 4% increase from the previous year.

Although retirees are moving at an increasing rate, choosing the right place to retire can be a complicated decision that requires careful due diligence and planning. In this article, we’ll explore a variety of factors to consider when deciding whether to relocate in retirement, so your new home remains aligned with your financial and lifestyle goals.

5 Factors to Consider When Deciding If Relocating in Retirement Is Right for You:

#1: Your Priorities

When it comes to choosing your ideal retirement destination, you should first identify what’s most important to you. For example, you may want to lower your cost of living so your retirement savings last longer. Or perhaps you wish to live closer to family or move to a warmer climate.

No matter your motivations for moving, there will inevitably be tradeoffs to consider as you weigh your options. Being clear about your priorities can help you evaluate these tradeoffs and make a sound decision for your future.

#2: Cost of Living

In many cases, relocating in retirement can be an effective way to lower your cost of living and extend your financial resources. In 2019, for example, the average person aged 60 or older who sold their home and relocated to a cheaper housing market unlocked nearly $100,000 in home equity, according to a recent study.

Indeed, the cost of housing, groceries, healthcare, and taxes can vary significantly from one location to another. To ensure your potential new home fits comfortably within your retirement budget, it’s important to understand how differences in the cost of living may affect your income needs.

If you’re looking for a low-cost retirement destination, U.S. News & World Report updates its list of The Most Affordable Places to Retire each year. Alternatively, if you have a location in mind, you can use a cost-of-living calculator to see how much income you’ll need to maintain your current lifestyle in your new home.

#3: Retiree Taxes

One of the top reasons retirees relocate is to move to a more favorable tax environment. Since taxes can have a substantial impact on your retirement savings, establishing a residence elsewhere can help you preserve your nest egg longer.

Some states have no state income tax, making them attractive options for retirees. Currently, tax-free states include Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

In addition, New Hampshire and Tennessee have no state income taxes for earned income but do tax dividend and interest income. Other states offer specific tax benefits for retirees, such as exemptions on retirement income or Social Security benefits.

Also, keep in mind you don’t necessarily need to live somewhere year-round to benefit from local tax laws. In most cases, the IRS requires you to live somewhere for at least 183 days of the year to establish an official tax residence.

#4: Access to Quality Healthcare

When it comes to relocating in retirement, another important consideration is your access to quality healthcare.

According to the National Council on Aging, nearly 95% of older Americans have at least one chronic condition, and nearly 80% have two or more. Since healthcare needs tend to become more complex as we age, it’s crucial to have high-quality medical facilities nearby.

As you evaluate your relocation options, consider the availability and proximity of hospitals, specialty clinics, and healthcare providers. In addition, if you’re considering moving before age 65 and plan to purchase insurance from the ACA Marketplace, make sure your new state offers reasonable insurance options for your healthcare needs.

#5: Quality of Life

Quality of life is a broad term that can include everything from the local climate and culture to your overall sense of safety and security. Your quality of life in retirement will also depend in part on how closely your new environment aligns with your lifestyle goals, hobbies, and interests.

For example, if you enjoy outdoor activities, you may want to move somewhere that has easy access to hiking and biking trails, parks, and other recreational facilities. Or if you plan to travel frequently in retirement, you may want your new home to have easy access to a major airport.

For many retirees, your quality of life will also depend on less tangible factors, like your mental health and overall happiness level. Thus, it’s important to consider the local community and the social opportunities it provides, as loneliness and isolation can be particularly challenging for those in retirement.

Being close to children and grandchildren is also a high priority for many retirees. It’s important to consider how often you plan to visit them and how you will get there. Will you be okay taking numerous short flights or long drives throughout the year? Maybe it’s more important for your overall happiness to be located in the same city.

Ultimately, relocating in retirement isn’t just a financial decision but one that considers all aspects of your well-being. If relocating is part of your plan, make sure the destination you choose supports your various needs and values. 

Additional Factors to Consider When Relocating in Retirement

In addition to the considerations above, other factors to consider when relocating in retirement may include:

  • The local real estate market. If you’re planning to buy a home in your next location, it’s essential to understand the local real estate market. Housing prices, property taxes, and insurance costs can significantly impact your retirement budget. Therefore, it can be beneficial to work with a local realtor who understands the market and can guide you toward areas that suit your budget and lifestyle preferences.
  • Climate and weather. The weather plays a significant role in our daily lives, and this holds true in retirement as well. While some people might dream of a beachfront condo where they can soak up the sun, others may prefer a mountain cabin with cool summers and snowy winters. Be sure to consider your climate preferences when choosing your retirement destination.
  • Retiring abroad. Whether you’re drawn to the affordable cost of living in some countries or the allure of a new culture, retiring abroad comes with a unique set of opportunities, challenges, and considerations. Be sure to spend ample time in the country you’re considering, educate yourself on its healthcare and tax systems, and consider the emotional impact of living far from home before relocating to a new country.
  • Proximity to loved ones. Lastly, you may want to consider the proximity of family and friends when choosing your retirement destination. Living closer to your loved ones can provide emotional support and practical assistance as you age, while moving to a far-off place might make visits less frequent. Ultimately, this is a personal decision that depends on your family dynamics and preferences.

Satori Wealth Management Can Help You Determine if Relocating in Retirement Is Right for You

Relocating in retirement is a significant consideration that can greatly affect your quality of life and financial well-being in your golden years. While it offers new and exciting opportunities, it can also present a unique set of challenges. Thus, it’s important to do your homework and consider the various tradeoffs involved with moving before committing to a new location.

If you’re considering relocating in retirement, Satori Wealth Management can help you develop a comprehensive retirement plan that considers your financial needs and lifestyle goals. To begin your retirement planning journey, schedule your Free RetireNow™ Checkup today.

Maximize Your Social Security Benefits

Social Security is an important source of income for many retirees. Unfortunately, it’s all too easy to make mistakes that significantly reduce your benefits. In fact, only 15% of Americans preparing for retirement strongly agree that they know how to maximize their Social Security benefits, according to a 2022 report from the Nationwide Retirement Institute.

The good news is many of these mistakes are avoidable once you’re aware of them. In this blog article, we’ll explore eight common mistakes people make when claiming Social Security benefits and how to avoid them, so you can maximize your income in retirement.

To maximize your Social Security benefits, avoid these eight potentially costly mistakes:

Mistake #1: Claiming Your Benefits at the Wrong Time

The age at which you claim Social Security benefits can significantly affect the amount of retirement income that you receive. By understanding the impact of claiming Social Security benefits at different ages, you can make an informed decision about when to claim benefits based on your financial needs and goals.

Your full retirement age (FRA) is the age at which you’re entitled to receive your full Social Security benefit amount based on your earnings history. For those born in 1960 or later, your FRA is 67.

To maximize your Social Security benefits, it’s best to claim them after you reach your FRA—if you can.

If you claim them sooner, your benefits will be permanently reduced by up to 30% depending on your age. On the other hand, if you delay claiming Social Security benefits beyond your FRA, your benefit amount will increase by 8% per year, up to age 70.

Before claiming your Social Security benefits, be sure to consider factors such as your other sources of retirement income and projected expenses. You can also use the Social Security Administration’s Retirement Estimator to help you determine the optimal time to start taking benefits.

Maximize Your Social Security Benefits

Mistake #2: Not Maximizing Your Spousal Social Security Benefits

Spousal benefits can be especially beneficial for couples with a significant difference in earnings history. That’s because the lower-earning spouse can receive a higher benefit amount based on the higher-earning spouse’s earnings history.

Your spousal benefits amount is generally equal to 50% of your spouse’s FRA benefit amount. For example, if your spouse’s FRA benefit amount is $2,000 per month, you could be eligible to receive up to $1,000 per month in spousal benefits.

To maximize your Social Security benefits, first be sure to understand the eligibility requirements for spousal benefits.

Specifically, you must be at least 62 years old and have been married at least one year to be eligible. If you’re divorced, you must have been married for at least ten years and not have remarried before age 60.

In addition, be careful not to claim your spousal benefits too early. If you claim them before your FRA, your benefit amount will be permanently reduced.

Also, keep in mind if you’re eligible for your own Social Security benefits based on your own earnings history, you’ll receive the higher of your own benefit amount or the spousal benefit amount.

Maximize Your Social Security Spousal Benefits

Mistake #3: Ignoring the Impact of Taxes on Your Social Security Benefits

Depending on your income level, up to 85% of your Social Security benefits may be subject to federal income taxes. To maximize your Social Security benefits, make sure you’re aware of these income thresholds.

The IRS uses your “combined income” to determine how your benefits are taxed. You can calculate your combined income by starting with your adjusted gross income (AGI) and adding back nontaxable interest, as well as half your Social Security benefits amount in a given tax year.

In 2023, single taxpayers with combined income between $25,000 and $34,000 may have to pay federal income taxes on up to 50% of your benefits. If your combined income exceeds $34,000, up to 85% of your benefits amount may be taxable.

These same percentages apply to joint taxpayers with combined income above $32,000 and $44,000, respectively.

Mistake #4: Ignoring the Earnings Test

If you start taking Social Security benefits before your FRA and continue to work, your benefits may be reduced if you earn more than a certain amount. In 2023, for example, your benefits will be reduced by $1 for every $2 you earn over $21,240—if you start taking benefits before your FRA.

To maximize your Social Security benefits while you’re still working, try to avoid claiming your benefits until you reach your FRA. Once you reach your FRA plus one month, your earnings no longer reduce your benefits, even if you earn more than the annual limit.

Alternatively, you may want to cut back your work hours to stay below the earnings limit. A financial planner can help you determine the best strategy to maximize your Social Security benefits.

Mistake #5: Not Considering How Divorce Affects Your Social Security Benefits

If you’re divorced, you may be entitled to claim Social Security benefits based on your ex-spouse’s earnings history. In general, those who meet the following criteria can receive a divorced spouse benefit equal to 50% of your ex-spouse’s FRA benefit amount:

  • Your ex-spouse is entitled to Social Security retirement benefits.
  • You were married for at least 10 years.
  • You’re at least 62 years old.
  • You’re currently unmarried (unless your ex-spouse has remarried).

It’s also important to note that your ex-spouse doesn’t need to have claimed their own Social Security benefits for you to claim your divorced spouse benefit.

To maximize your Social Security benefits after divorce, try to avoid claiming your divorced spouse benefit before reaching your FRA. Otherwise, the amount you receive will be permanently reduced.

In addition, if you’re eligible for your own Social Security benefits based on your own earnings history, you will receive the higher of your own benefit amount or the divorced spouse benefit amount.

Maximize Your Social Security Divorced Benefits

Mistake #6: Failing to Consider Survivor Benefits

If you lose your spouse prematurely, you may be eligible for Social Security survivor benefits. As the surviving spouse, you can receive a survivor benefit equal to 100% of your spouse’s benefit amount if you’re at FRA or older.

To maximize your Social Security survivor benefits, first be sure to understand the eligibility requirements. If you’re the surviving spouse, you must meet the following criteria:

  • Your deceased spouse must have worked long enough and paid enough Social Security taxes to be insured for benefits.
  • You must be at least 60 years old (or 50 if you have a qualifying disability).

Keep in mind your survivor benefits may be reduced if you claim them before you reach your FRA or are entitled to your own Social Security benefits based on your own earnings history. In addition, survivor benefits may be subject to federal income taxes if your income exceeds certain thresholds.

Maximize Your Social Security Survivor Benefits

Mistake #7: Not Checking Your Earnings Record

If your earnings record is incorrect or incomplete, it can result in a lower benefit amount, potentially costing you thousands of dollars in lost retirement income.

The easiest way to avoid this mistake is to check your earnings record annually to ensure it’s accurate and complete. You can create an account with the Social Security Administration (SSA) to keep an eye on your statement.

If you do find errors on your earnings record, be sure to contact the SSA as soon as possible to correct them. Fixing any inaccuracies before you’re ready to retire can help you maximize your Social Security benefits when it comes time to claim them.

Mistake #8: Not Seeking Guidance from Satori Wealth Management to Maximize Your Social Security Benefits

The decisions you make about when and how to claim your Social Security benefits can have long-term implications for your retirement income and financial security. Fortunately, a comprehensive retirement plan can help you avoid potentially costly mistakes, so you can maximize your Social Security benefits.

Satori Wealth Management can help you navigate the complexities of Social Security, as well as the trade-offs and considerations involved in claiming your benefits. We can also help you explore strategies for maximizing your retirement income while minimizing the impact of taxes.

If you’re ready to begin your retirement planning journey, schedule your Free RetireNow™ Checkup today.