Are You 3-5 Years From Retirement? Read These Tips!

We all know that life happens fast. Before you know it, retirement is just around the corner. If you are 3-5 years from beginning your retired life, here are a few tips on what to do now to make the most of your future transition.

Know your expenses: Develop a spending plan.

The most important part of planning for your retirement is knowing how much money you will need to live the life you want. After all, that’s why we spend our time and energy saving! If you don’t have a clear idea of what aspects of your lifestyle you want to change or maintain, your retirement finances will be unpredictable, too. Giving yourself a spending plan will help you make the most of your hard-earned money and feel confident in how you use it.

Estimate and determine your lifestyle and cost of lifestyle. 

Did you know there are typically three phases of retirement?

      1. Go-go (55-65): This is typically when retirees are the most active with travel, hobbies, visiting family and friends, exploring new activities, and enjoying their retirement. There’s an initial excitement to retirement that is fun and enjoyable. Take advantage of it!
      2. Slow-go (66-74): After the Go-go stage comes a bit more tranquility and easy living. From reading to relaxing at home and visiting with local friends and family, this phase of retirement has a fun and enjoyable cadence. There are still activities, and depending on your health, you can be as active as you’d like! But much of the initial hustle of retirement life is complete, and a slow-go life is the new routine.
      3. No-go (75+): The No-Go phase of retirement often happens due to slowing bodies and medical needs. There’s a comfort to what you know and like, and not many significant changes to lifestyle happen in this era of retirement. It’s a lovely way to spend your days reading, walking and doing light exercises, and spending quieter quality time with loved ones.

These phases are unique to you and should be given consideration prior to retirement. This is where working with a professional to understand future potential expenses is critical.

Research and estimate your health care costs.

The changing cost of medical care can be one of the biggest variables in retirement planning and spending. Simply put: you can’t know your future. It’s great to be prepared for situations like needing long-term or disability care and having the proper coverages in place to manage those costs. This can also reduce the burden on friends and family.

Look at your taxes now and in the future – make a tax plan.

Taxes are a part of life. Understanding your tax obligations during your retirement years can bring peace of mind to you and your family. From real estate tax to income taxes to fees due on any money taken from your accounts, knowing your responsibilities is a great way to prepare for your future.

Adjust for inflation.

Living in the United States isn’t getting cheaper, and that will continue to be the case as you age into retirement. These adjustments may not seem big on their own, but the cumulative impact over a retirement of 30 years can be significant.

Have an emergency fund and cash policy.

Always know how to handle emergency situations and how to fund them. This can keep you from accruing debt in your retirement years, which is difficult to get rid of due to fixed income and interest fees. Emergency funds can cover unexpected expenses and keep you on track for your retirement budget.

Understand portfolio distribution rates.

Our team can walk you through portfolio distribution rates. What it means in general is understanding how much you can take from your accounts at different times and with different penalties or fees. Each portfolio is different, depending on where your assets are invested. Understanding where your money is and how it is working for you is a great way to feel confident about your future financial situation.

Set an investment allocation that suits your time horizon, risk and needs.

Investment allocation means keeping a diverse portfolio of assets that vary based on risk, time before withdrawal, and access to cash. The right allocation for you can vary significantly from your friend or colleague’s allocation, so we recommend working with a professional that can help you best understand what will work for your needs and timeframe.


Curious to learn more? Contact us! We’d love to hear from you.



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