Baby Boomer Couples: Have You Taken These 3 Important Pre-Retirement Steps?


Time flies when you’re building a career and raising a family. If you’re like many baby boomers, you probably thought for many years that retirement was something that was far in the future. Now, though, all of a sudden it’s only a few years away.

You’ve probably been saving diligently and contributing to your 401(k), IRA and other retirement savings vehicles. Perhaps you have a good reserve built up to fund your lifestyle after you stop working, and maybe you even feel confident about your financial future.

However, even if you have met your savings goal or are on track to meet your goal, there are still a few challenges to work out before you stop working. Retirement is a major life change, and you may find it causes complications, both financial and personal, that you hadn’t anticipated.

Below are three planning steps that every couple should take before they retire. Haven’t done these? Then you may have some additional planning to do before you leave your job.

Discuss your vision for retirement with your spouse.

One potential challenge is that you may find your spouse’s vision for retirement is different than yours. You may want to travel, go out to eat and take up new hobbies. Your spouse may want to relax at home and spend time with family. Some retirees don’t really discover how they want to live life until after they retire.

While you and your spouse may not be able to predict everything you would like to do in retirement, you can have a conversation today to see where your heads are at. Talk about retirement and how you envision spending your time. What activities and values are important to each of you?

If you have differing plans or visions, now is the time to discuss those differences. You don’t want to retire and then realize you each want to enjoy retirement differently. By discussing this in advance, you can develop a plan that meets objectives for both of you.

Create and test-drive a budget.

A budget may be the most important financial tool at your disposal in retirement. It helps you understand how much money you have to spend, where you spend your money and how to make adjustments.

Unfortunately, many people don’t use budgets. According to a Gallup study, two-thirds of American households don’t use a budget to track their spending.1

Create your budget today, estimating both your fixed and discretionary expenses. Then take it for a test drive. Try living on that budget for a month or, better yet, six months. Are you comfortable? If so, your budget may be accurate. If you’re not comfortable, you may need to rethink your expected spending in retirement.

Develop a health care strategy.

Medicare will likely play a large role in funding your health care in retirement. It doesn’t cover everything, though. In fact, Fidelity estimates that the average 65-year-old couple will spend $245,000 on out-of-pocket health care expenses in retirement.2

That figure includes premiums, deductibles, copays and more. It doesn’t include long-term care, which can be another significant expense. Develop a plan to cover these costs so they don’t drain your retirement assets.

Long-term care insurance could be an effective strategy. Think about funding your health savings account (HSA) as much as possible so you can pay for medical expenses in a tax-efficient manner. Invest in your own health through exercise and healthy eating to reduce your likelihood of suffering a serious illness or injury.

Have you covered these three planning items? If not, talk to us at Bridgeriver Advisors LLC in Bloomfield Hills, Michigan. We welcome the opportunity to help you plan your ideal retirement. Let’s connect today.

1http://www.gallup.com/poll/162872/one-three-americans-prepare-detailed-household-budget.aspx

2https://www.fidelity.com/about-fidelity/employer-services/health-care-costs-for-couples-retirement-rise

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

15928 - 2016/7/28

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