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Retirement Readiness: Preparing for the Three Phases

While the reality of retirement has changed for people over the years, it still remains part of the American Dream. Realizing everything that dream entails – living the lifestyle you envision, pursing items on your bucket list without worrying about money – takes looking at the big picture and having the right preparation.

Phase One

Often called the “go-go” phase of retirement and includes activities such as traveling, checking off bucket list items, pursing hobbies, volunteering, spending time with family and friends, and so on. Considerations for this phase may be determining:

  • Anticipated household expenses
  • Additional discretionary, lifestyle expenses that reflect inflation
  • When and how to maximize Social Security benefits
  • What additional healthcare coverage is needed, outside of Medicare benefits
  • How to tax-effectively handle required minimum distributions withdrawn from retirement plans
  • Your vision for the type of housing and care you want for you and your spouse

Phase Two

Usually refers to a slow-down as adventure and activity could be more limited due to health issues. Considerations for this phase entail:

  • Monitoring of income supply and spending habits
  • A reassessment of how your assets (retirement accounts, etc.) are allocated to ensure they are appropriately diversified for your age and circumstances
  • An update of your estate planning documents, ensuring beneficiary and account information are correct and readily accessible
  • Any plans for you and your spouse to “age in place” or remain in your home

Phase Three

You may be more sedentary as you deal with the realities that come with advanced age. Considerations for this phase include:

  • Health concerns, mobility issues, home upkeep and other factors that may require a move to a new housing situation
  • Transportation options if driving is no longer a possibility
  • Coping with the reality of losing your spouse and living alone
  • Rising healthcare expenses that tend to mount during this stage
  • Your intentions to pass along certain assets to loved ones and/or an organization are specified in writing in legal estate planning documents
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