Planning your ideal retirement lifestyle

You’ve spent decades working hard and saving, so your retirement years should be what you envision. After all, you'll want to feel the same sense of fulfillment and purpose that you did in your working years. 

Defining your retirement lifestyle and aspirations is a critical first step. We can help you create a tax-efficient retirement income strategy to help you achieve the goals that are most important to you, now and into retirement. 

As you begin to plan your retirement lifestyle, consider these questions, thought starters and financial considerations to help you clarify the activities, ideals and lifestyle you value most. 

1. What activities do you want to do?

There are many ways to spend your free time that could add meaning and value to your life in retirement. Consider the scenarios below:

Financial considerations to think about: Whatever you’d like to do, you’ll want to take the necessary financial steps toward making your retirement dream a reality. For example, hobbies such as woodworking or earning a private pilot’s license may require a significant initial investment. Pursuing a second career or starting a new business means you’ll need to consider the potential impacts on taxes, Medicare premiums and your Social Security benefits.

Financial considerations to think about: Travel costs can add up, and accounting for these expenses will vary depending on your travel destination, length of stay and caliber of accommodations. For example, if regular visits to friends and family are a priority, including these expenses in your monthly or annual budget can help you maintain flexibility in your plans.   If you prefer big annual trips, consider setting a lump sum aside at the beginning of every year to fund your trips. Depending on where you travel, you may also want to review your health insurance options because Original Medicare does not provide international coverage.

 

Learn more: How to plan travel in retirement: How much to budget

 

3. Who do you enjoy spending time with? 

When you retire, you may feel the loss of social connections at work. But the increased personal time may allow you to devote more energy to your other relationships:

Spouse or partner	Family	Friends	Community
What new activities can you do together? Do you envision more time together or do you anticipate focusing on separate hobbies?	Is it important for you to spend time with children, grandchildren or parents? How far away are your parents, children and grandchildren? How often will you travel to see family?	Do you like to entertain? What kind of social activities do you enjoy? Is meeting new people a priority? What classes, clubs and organizations will you participate in?	Do you want to get more involved with a religious group? Is your alma mater important to you? What other causes are you passionate about? Are there any non-profit organizations you want to volunteer for?

 

Financial considerations to think about  Factor in costs associated with extra travel to family or new activities you engage in with the important people in your life. You’ll also want to account for any additional expenses related to entertaining, dining out, gifts and donations in your budget.

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Advice spotlight

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Don’t wait until retirement to think about your ideal retirement lifestyle.

To ensure your retirement income strategy supports your ideal lifestyle, start thinking about what you want to do in retirement while you’re still working. The more time you have to plan and save, the better the chances of reaching your financial goals.  

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4. Where would you like to live? 

When planning your ideal lifestyle in retirement, some important questions to consider are: 

Stay in the area	Relocate to a new community	Maintain multiple homes
Maintain your current home?  Purchase a condo in a nearby city?   Downsize to a smaller home?  Upgrade to a bigger home so you have more space for extended family?	Move closer to family?  Relocate near activities you love?  Try out a new climate?  Live abroad?  Move into a retirement community?	Be a “snowbird”?  Maintain a vacation home?  Purchase a second home near your children and grandchildren?

Financial considerations to think about  Your home is a large factor in your retirement lifestyle, so consider what financial adjustments may be needed. For example, living as a “snowbird” or owning a vacation home will come with extra taxes and upkeep for your properties. Renovating your current home will require a significant one-time expense and downsizing may provide you with additional income to reallocate. Regardless of your decision, you’ll want to think about ongoing costs above and beyond rent or mortgage. If renting, you’ll want to think about inflation and protection. If you own your home, you’ll want to factor taxes, insurance and upkeep into your retirement expenses.

5. How do you intend to stay healthy and active? 

As your lifestyle changes in retirement, consider how you’re planning to maintain your mental and physical well-being as you age. 

Financial considerations to think about  Even with Medicare coverage, the costs of health care in retirement can be significant and many retirees need significant care later in life. It’s important to account for these expenses in your retirement income planning and explore how solutions like long-term care insurance could help offset the expense of future care needs.

6. How do you want to make an impact? 

Retirement goals can include helping others and giving back. Think about the people who matter to you, what you hope the future holds for them, and how you might help them realize their own dreams. What organizations or causes represent your values? How might you support them? 

Financial considerations to think about  If it brings you joy to see how your assets are making an impact on others, consider a “giving while living” approach for your estate. If you're financially secure, giving an early inheritance gift or making a substantial charitable donation can make a big difference in the lives of the people and organizations you care about. It may also provide tax benefits if you donate to charity through a qualified charitable distribution from your IRA, or if you use a donor-advised fund or other structured vehicles.

7. What would you like your legacy to be? 

The legacy you leave behind is shaped by the people, causes, ideas and actions you support now and in the future. Which people and organizations are important to you? What do you want to pass on to them? 

Financial considerations to think about  As you reflect on your legacy, consider incorporating your values and priorities into your estate plan. By planning ahead, you can identify strategies that may benefit your heirs and causes most important to you, while also potentially reducing the size of your taxable estate.

Start planning your ideal retirement lifestyle today 

When it comes to achieving a fulfilling retirement, having a clear vision of your priorities will form the foundation for your financial goals and financial strategy. We can help you enhance your retirement income to help support your retirement lifestyle goals.