Financial Planning — 5 Reasons It's Vital After You Retire Too
Financial planning is key to building a healthy retirement nest egg. But should financial planning stop once you actually pull the trigger on your retirement? No. In fact, it may be even more important now. Why? Here are five reasons to continue — or start — financial planning after you retire.
1. You Change Your Financial Focus
The savings years during your working life focus on just a few key elements. The most important for most is to save as much as they can. They also must balance risk and reward, looking for the highest returns within risk levels they are comfortable with. However, now you must shift focus from accumulation to preservation. This is a new set of objectives and skills.
2. You're More at Risk
Retirees have less tolerance for financial risk once they begin withdrawing savings. Without regular income and a growing career, you can suffer from economic downturns, higher-than-expected expenses, individual investment loss, and emergencies. Prepare yourself to weather these risks and adjust your sails when they occur.
3. Your Budget Changes a Lot
Most retirees downsize in retirement. However, some want to spend money on things like travel that they couldn't do earlier. Whatever your retirement goals, your budget may look very different than it did when you were working. Budgeting is hard for many Americans, so you do well to get help making it work — and keeping it working.
4. You Face New Costs
What new costs will you face in retirement? For most, healthcare is the biggest concern. Couples who retired in 2022 are estimated to spend about $315,000 on health care during retirement. How will you make this work, and how can you minimize its impact on the rest of your retirement? Plan ahead and meet new expense challenges by strategizing with a professional.
5. You May Have Changed Goals
Finally, how does your actual retirement compare to what you planned all those years ago? Perhaps you have to (or want to) retire early. Maybe you wanted to downsize but are now attached to your home. Or you might want to move nearer your family. Now that the event is happening, it's time to reassess your goals and resources to achieve your actual retirement — no matter what it looked like in the past.
Where to Start
Which of these factors is most important to your finances? No matter whether you want help adjusting expectations, dealing with economic ups and downs, or budgeting realistically, the best place to begin is a financial planning consultation. Meet with a qualified planner in your state today to learn more.