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Planning for a Balanced Retirement

A recent survey conducted by The Retirement Project revealed that while just over 60 percent of the Baby Boomers polled said they felt financially prepared for retirement, only 47 percent said they were ready for the everyday activities of retirement. Financial readiness is a vital part of retirement, but planning for a balanced lifestyle once you retire is just as important.

Only a quarter (25%) of seniors who took the quiz had a written description of what a perfect day or week would be like once they retire, and just over half (55%) feel their retirement plan is unbalanced between personal and financial factors.

Figuring out what your lifestyle will be like once you retire may seem unrelated to your financial planning, but unless you can write down what the ideal retirement lifestyle looks like for you, you can’t plan for it financially. Where you plan to live, available transportation, medical costs, social events, hobbies, and exercise all contribute to your retirement income needs.

Sarah is in her sixties and is planning to retire in five years. She currently lives in Pasadena, CA in a two-bedroom apartment. Her two sons also live in California – one in Los Angeles and one in San Francisco. Although there is a strong family reason to stay in California, Sarah is seriously considering moving to Florida, because it will give her a much better quality of life.

Housing is 77 percent cheaper in Clearwater, Florida than Pasadena, California and the overall cost of living is about half. (52%) Sarah currently earns $50,000 a year, but she would need only $24,072 to have the same lifestyle in Clearwater, Florida. She and her husband could live quite comfortably on just their Social Security income.

This reduction in income-needs means that their other investments and savings could cover vacations and trips to California to see the family. They’ve visited Clearwater many times and have a very good idea of what their everyday life there would be like, so planning for it financially has been easy to do.

Creating a balanced retirement lifestyle means you need to plan for your everyday activities and the lifestyle you want. Then figure out the best way to how to fund that lifestyle. Don’t neglect either side of the equation.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.
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