Retirement Planning

Retirement Travel Tips for Planning a Vacation

ocean beach with red umbrellas - retirement travel tips

Traveling can be a major part of your lifestyle If you are part of the baby boomer generation. With the children grown and gone, these empty nesters have all the freedom to spend their time and money exploring the world.

We all know that traveling can be exciting, but it takes time and effort to set up your travel itinerary and organize a whole trip. Even though it does take time, but it is well worth it because it will ultimately save your precious time when you are actually there to explore.

Here are some helpful travel tips to consider before planning a vacation or going on a long-term trip:

Prepare your home before going away.

It might be hard to leave your house when you are going away on a short or long trip. But creating a list of tasks needed to prepare your home is one of the most important tips.

When you check off each task accomplished, you can head off on your adventure knowing that your home is safe.

Clean out the refrigerator and freezer and get rid of all perishable goods.
Empty and wash all trash bins.
Empty the dishwasher and leave it cracked open, so any additional water in the system will evaporate.
Set the thermostat to practical temperature. For our winter trips, we always set the thermostat to 55 degrees. It keeps the house well above freezing and prevents the pipes from bursting.
Make sure that the smoke detectors are working properly.
Turn off the water valves to toilets, sinks, dishwasher, and washing machine. This can prevent any damage from water leaks. We usually turn off the main water line into our house before we leave.
It is recommended to turn off the water heater. There is no reason in maintaining a hot tank of water for months when you are away traveling.
If you are leaving for a very long time, I would recommend unplugging all electronic devices.
Arrange with the local post office to have your mail is forwarded or held. Mail can be held for 30 days or less, and you can do it through USPS.com. Although, our small-town post office can hold mail for three months. Also, reserving a P.O. Box from a local post office can be a good idea as well. Even though we pay all our bills online, we still receive a lot of leaflets and flyers in our mailbox. When you are away on a long trip you do not want a bunch of letters hanging out of your mailbox, shouting to the world that you are not home.
If you are planning a long-term trip, try to put on hold your cable TV and internet. Not all cable TV and internet service providers will allow you to do that, but some will. So, if it is possible put your expensive services on hold.
I like to leave my house clean before I go on vacation even though it is the last thing you want to do in the middle of packing. That is why I always thank myself and feel happy when arriving back to a clean and uncluttered home.
The ideal way to leave your car is parked in a garage out of everyone’s eyes. We do not have a garage, so we have to leave our cars parked in our driveway. Another tip is to disconnect the car battery to prevent drainage.
It is important to have trusted neighbors or hire a house sitter. When we travel, we leave a set of house and car keys with our trusted neighbors. We feel grateful to have good neighbors who help to keep our home safe while we are away.

Benefits of using travel apps.

There are apps for almost everything these days and it includes traveling. The rise of websites gives us direct access to hotel and airline booking.

But let’s face it – vacation planning can be overwhelming. You can spend hours browsing hundreds of travel websites and blogs researching destinations, accommodations, available flights, tours, and activities. You can go back and forth multiple times before ultimately choosing one.

But if you want to spend more time enjoying your trip and less time planning, you should consider using travel apps.

Even you do not use apps in your daily life, consider taking advantage of many helpful apps when you start preparing for your travels.

person holding a smartphone - retirement travel apps

If you are looking for a travel app to help to book your trip, Kayak is one of the best apps to make that part of travel easy. I prefer to use Kayak because it is a one-stop shopping app for browsing hundreds of websites for the best deals on hotels, flights, vacation package deals, and car rentals.

I like to use TripAdvisor while researching and reading reviews of restaurants, hotels, and destinations. The best part is you can make reservations directly from the app.

Yelp features reviews written by people who visited local eateries, cafes, diners, restaurants, etc. I even wrote several reviews and posted them on this website. If you are looking for a local flavor, this app might be your best bet.

Google Maps is one of the best driving directions apps available. You do not need to carry a printed map with you anymore. It might be not perfect, but it helps me to get around in places or towns I never visited before.

WhatsApp is one of my favorite apps to communicate with friends and family who live overseas. I use simple text messages, group chats, video chats, and phone calls to keep in touch with everyone when we travel. We can exchange photos and videos without SMS fees.

The Best Travel Apps from NomadicMatt

Benefits of using a travel agent.

The travel industry has changed over the last decade. These days many people prefer to plan their own trips because online booking makes it easy to book airline tickets, hotels, tours, or cruises without visiting a travel agency.

However, the traditional travel agencies have not entirely disappeared. Many have adapted to the modern era. And there are still some situations when you may want to work with a travel expert instead of doing it yourself.

Here are the top benefits of using a travel agent:

Travel agents are well-connected experts. They will do all the work for you if you do not like planning or have a complicated itinerary. If you are planning a big family vacation in another country, a travel agent can help to coordinate all the logistics. So, instead of spending hours on the computer searching for the best deals you will just pay the bill and show up at the airport.
Many travel agents specialize in a particular type of travel such as cruises, luxury tours, resorts, etc. Travel agents have established relationships with many travel companies. They can help you plan a trip that meets your budget and needs without wasting your time and money on the things you are not interested in at all.
Travel agents often have access to benefits that you might not be able to get on your own. Whether it is a hotel room upgrade without added expenses, better seats on the airplane, reservations to a popular tour, or event tickets, a travel agent can add some perks to your trip.
Using a travel agent can help you save time and money even you have to pay a fee for their services. Generally, all agents receive information about rates and discounts and access to promotions from the resorts, tour operators, cruise lines, and other travel industry providers that are not available to the public.
When you are working with a travel agent you can rely on her/his travel assistance if something goes wrong with your trip arrangements. You can call your travel agent if you need to rebook your flights or need assistance with the wrong hotel room or no scheduled transportation to a resort or a theme park.

Consider buying travel and medical insurance.

You do not have to be a frequent traveler to know that decent travel and medical insurance can save you time, money, and a lot of hassle.

We always buy travel insurance when we go on our overseas vacations.

But choosing travel insurance is not one size fits all process. You have to consider trip cancellation, medical emergencies, policy cost, exclusions, etc.

It is recommended to buy travel insurance within 15 days of making the first deposit on your trip, since buying early can qualify you for bonus coverages. You have to read through the insurance policies to understand what coverages are offered without an additional cost. Those bonus coverages may include:

Coverage for pre-existing medical conditions
Emergency medical insurance moved from secondary to primary
Additional accidental death coverage

The main thing to remember is that you must buy travel insurance coverage before it is needed.

Even though some travel medical plans are available for purchase after you have left, most plans with medical coverage are required to be purchased before departing. That means you cannot buy any medical coverage once you got sick and need medical help.

The same applies to all travel insurance coverage.

You do not need to be in perfect health to start traveling. But you need to be in good enough health to endure the stress of being on a road for a long-time. Therefore, if you have a chronic health issue, I recommend checking with your doctor before making long-term travel plans.

Keep in mind, that Medicare does not cover medical expenses happen outside of the US. That is why you will need to buy travel insurance to cover any medical emergency.

How to Find the Best Travel Insurance from NerdWallet

What to pack for long-term travels?

When packing for a long-term trip, the most important things to keep in mind are the length of your trip and the weather.

woman in boots with luggage bag - retirement travel tips

When I am preparing for a trip, I always start with a travel packing list, so I do not forget anything important. My general packing list includes:

Clothes – underwear, sleepwear, socks, T-shirts, a casual shirt, one pair of jeans, one pair of pants, shorts, a few dresses, swimsuits, a sweater, shoes, and sandals.
Accessories – a hat, sunglasses, an evening bag, a purse, a few belts, jewelry, and an umbrella.
Toiletries – toothbrush, toothpaste, dental floss, deodorant, hairbrush, curling iron, sunscreen, makeup kit, medications, bandages, a small bottle of shampoo and conditioner.
Electronics – cell phone, universal plug adapter, laptop, and electronic chargers.
Documents – passport, copy of passport, emergency contacts, list of medications, a printed list of passwords, credit cards/ATM card, money/ cash.
Misc. items in my handbag – house keys, glasses, disinfecting wipes, hand sanitizer, earplugs, headphones, a book.

We all know that the pandemic has changed the way we travel. Make sure that you have your vaccine passport (vaccination certificate) or negative Covid-19 test results in your handbag. Many airlines require one of these forms to proceed. And do not forget to have a face mask on you and to keep a few extra in your handbag or carry-on.

Safe and Happy Travels!

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What are your favorite tips when planning a vacation or a long-term trip?

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5 Common Mistakes to Avoid When Choosing a Place to Retire

by Maggie Leave a Comment

old town-bridge-choosing a place to retire

The best thing about retirement that finally you can live anywhere you want. You no longer need to live closer to where your kids go to school or your work. Instead, you can move to a place with beautiful views, a better climate, a lower cost of living, or just a place you were dreaming about.

However, deciding on where to retire can be a difficult task. It will take a lot of time and effort. Unfortunately, one of the biggest mistakes people make when they choose a place to live in retirement.

You need to envision it, set up the priorities, do the research, make a list of areas, and then visit several places before you finally decide where to move in. Besides the financial issues such as cost of living and taxes, you need to consider the weather, amenities, environment, and how close you want to live to your family.

Planning to move in retirement can be exciting and stressful. However, some common mistakes can ruin even the most carefully planned retirement.

To help you make smart decisions, I came up with a list of 5 Common mistakes to avoid:

1. Not visiting enough places before deciding where you want to live.

Have you thought about your retirement priorities?

Do you like to live closer to the beach, golf course or near the mountains?
Do you want to move into an active adult community, a small town, or prefer rural areas?
Have you discussed your plans with your spouse or partner?

Every retirement website recommends doing detailed research before you commit to one place. The internet has lots of information on retirement communities, places to retire, and the cost of living there. It is a good idea to start planning early before you retire so you can avoid the costly mistake of moving around until you find the place you really like.

Start with creating a checklist of your priorities because it would help you narrow down the number of places you want to move in.

It will be smart to visit the places on your wish list if you are still working. Internet research is great, but often you need to see a place with your own eyes. Because while everything looks amazing online, a half an hour drive to the nearest grocery store can ruin the comfort of your daily life and would become a huge inconvenience.

My favorite go-to website is TopRetirements.com

This website provides you with tons of information for the best retirement communities, active adult communities, and places to retire. If you are at the beginning of your research, start with this website to get some ideas and then decide if you are ready for a visit.

When you travel, make sure to explore the town you like as a potential “best place to retire”. Drive or walk around and decide what you like or dislike about the neighborhoods. Take a tour through any active adult communities if there are any in the area.

It is always a good idea to talk to locals and ask questions about their life there. If you are planning to visit several neighborhoods do not forget to take notes so you can refer to them later. Recently I read that some people even prepare pros and cons spreadsheet while visiting retirement communities.

When you visit a place, do not spend all your time near the hotel. Walk around, visit neighborhoods to get a sense of people. For me, the ideal place to move in would be the place with:

Walkable streets
Close to shopping areas
Close to parks or green spaces
Short drive to the beach
Access to public transportation
Proximity to medical facilities

Another tip for avoiding common mistakes is to visit your favorite place during different seasons. Weather is an important factor, and you want to make sure that you like your new home in all seasons.

lake-snow-trees - choosing a place to retire

I do not like hot and humid weather, so even we want to move to Florida I cannot stay there during the summer. Because of that, we would need to have another place where we can escape the hottest months of the year.

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2. Not renting before buying a retirement home.

I am sure you heard the stories about retirees who regret that they did not live in the area before they bought their retirement home. It is so easy to get excited about the community or new development that seems to meet your dreams. But once you settled down it might be too late to realize that you miss the comfort and amenities of your old life.

It is hard to really know a place before committing to that area unless you rent it first. But if you do not want to rent a place before you buy it, make multiple visits during different seasons to get a feel of this area you will call home for a long time.

Renting a home in the neighborhood you like can help you live like a local. Also, renting make sense if you are considering a move to a new lifestyle. In retirement, we are planning to move from the suburbs to a city. It will be a huge change in lifestyle for us, so we want to test it out for a few years by renting an apartment and see if we like it there.

Renting can also be a temporary step if you are not financially ready to buy a house. More retirees are renting these days because they do not want to be in charge of maintenance or yard care.

Buying a home at any stage of life is a major purchase and not a quick decision. It costs a lot to move to a new home, so you have to plan wisely.

It is important to remember that your retirement life can last for 20 or 30 years. Therefore, you need to find a home with an understanding of your long-term needs. It is great If you healthy right now, but it might change in the future. If one of the spouses gets sick, you will want to live closer to the medical center for regular appointments rather than travel for hours to see a doctor.

The best advice is to rent before you buy because you will get fewer surprises in the future. Otherwise, it can be a costly mistake.

3. Moved to be closer to family.

Many people move to be closer to their children and grandchildren when they retire. In many cases, it is a great idea.

But the situation might reverse, and you will be chasing your children around the country if they choose to relocate. You do not want to be in situation when you move to the area and then find out that your family will be moving away.

grandma with granddaughter baking - moving closer to family in retirement

4. Not doing your due diligence before moving to a new place:

Moved to the wrong environment.

That is a common mistake for many retirees. That is why you need to make sure that the location meets all your needs before you move in.

Everyone knows that staying socially active makes you happier and healthier in retirement. But where are you going to meet new friends? Does a new place have social events, clubs, or gathering places? Is it close to a coffee shop, pool, library, or movie theater?

We live on the east coast. Here everything is close enough if we want to drive for a few hours to get to another state or town. But if we move to Texas or Arizona, I will miss the variety of New England scenery and proximity to a familiar environment. Everything will be far away if we want to have a change of scenery.

If you are planning to move to one of many retirement communities, make sure that it will be a good fit for you. I would recommend renting a unit and spend a week there. Go to the restaurant where everyone eats and see if you like the food and ambiance. Go to the games room, swim in the pool, and talk to residents about life in the community.

The best advice is to find a place that matches your lifestyle when choosing a place to retire. Hence, do not move to a rural area if you love going to museums and theaters.

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No access to good healthcare.

Keep in mind that access to good healthcare and medical facilities is a must when looking for a place to retire. When you are in your 60s and 70s, you are still active and healthy and probably need only routine doctor visits.

But as you grow older, you will need access to retirement facilities, home care providers, and transportation for people with disabilities. And you do not want to move to another place in search of better healthcare in your late 80s.

5. Not considering the design of your retirement home.

That is a common mistake for many retirees when they buy for today and not for tomorrow. You are healthy and active today, but unfortunately, your mobility will decline with age. That is why you need to consider the design of your home with the idea of how it might change in the future.

Everybody loves living in a new two-floor modern-designed home. But what happens if one of the spouses will lose mobility and will be in a wheelchair? How will you go around the stairs? It will be stressful to start looking for a single-level house while trying to sell and move out of your brand-new home.

Have you thought about if your house is accessible for your future needs?

You might not need it right now, but life can change very quickly in 10 or 15 years. It will add a lot of stress and money if you need to renovate your home later to fit your physical abilities.

The important thing to remember that if you are moving to a new place make sure that your house is a comfortable place to age. In the end, it can be expensive and difficult to remodel a place with lots of stairs, a second-floor master bedroom, tall kitchen counters, narrow doorways, and more.

Final Words

Choosing a place to retire may be one of the biggest decisions you will ever make. Hence, do not make it in a rush. Take your time and choose wisely.

But do not be discouraged by the amount of work you have to put in upfront. After all, you will benefit greatly by living and enjoying the retirement of your dreams.

What are your top retirement mistakes to avoid?

Share this article if it helped you!

How to Travel on a Budget in Retirement

by Maggie 4 Comments

man in the field - travel on a budget in retirement

Traveling in retirement is the most common dream. Ask anyone about retirement plans and you will find something in common – a desire to travel and see the world.

According to the Transamerica Retirement Survey, almost 70 percent of American workers want to travel the world in retirement.

Why? Because retirement is the ideal time of life to travel, to enjoy the views and taste of the places people could not afford to experience when they were younger. But travel as a dream often gets left unfulfilled because many people worry about the high costs of travel.

According to stats, an international trip typically costs up to five times higher and lasts three times longer than a domestic trip.

For those people who are still working, travel often means a rushed one-week or maximum of a two- week vacation. But when you retire you have more free time on your hands. And having more time on your hands means being more flexible. You can relax and enjoy your destinations at a slow pace. You can travel as long as you choose, and you can time your trips the way you want.

However, you have to be careful about how much you are spending because you are no longer receiving a regular salary and living on a fixed retirement income.

In this article, I have provided some helpful tips for your future travels in retirement and how to budget for it.

Pick destinations that off-season.

One of the biggest ways to cut your travel expenses is to travel during the off-season. You can cut the costs on plane tickets, hotels, food, museums, and tours. When places on your bucket list are less crowded, they are also less expensive.

For example, summer (and winter in some places) is the busiest travel season for tourists in Europe. Therefore, spring and fall are good for traveling on a budget. You can enjoy mild weather, smaller crowds, natural beauty, and low prices. However, the Caribbean islands are a good place to travel during the summer. It is cheaper because of the hot weather and hurricane season.

Keep expenses low by traveling slow.

All travel blogs recommend traveling slow if you want to cut the cost of travel expenses. By staying put in one place longer will allow you to reduce the costs of tickets and accommodations. For example, going on a trip to Paris would cost me about $1,350 from Boston airport (round trip ticket) and a mid-range hotel about $250 per night. Overall, I will spend around $2,850 for transportation and accommodations on a one-week trip.

I can stretch that trip to two weeks and the price will go up only $1500 since I do not have to pay for the plane ticket for my second week. But if I choose to travel during the off-season, I will only pay half price for the same travel expenses.

Paris is a very expensive city, but you can keep travel expenses low by renting a room or an apartment instead of staying at the hotel. So, if I prefer to rent an Airbnb apartment the cost would go down to $100 per night and I can cut expenses on food and eating out.

Instead of rushing through the city or country, take more time and try to experience the destination more like local people would do. The trick is to spend more time in one place so you can reduce your per-day travel expenses by spreading the cost of an airplane ticket over a long trip.

Cut travel costs on lodging.

The best way to avoid costly travel in retirement is to cut the costs of your lodging. Everyone likes to splurge on the fancy hotel. But if you are retired and traveling on a budget it is better to reduce your expenses by finding inexpensive lodging. Depending on the type of accommodation you choose and the city (or a country) you are visiting, you could be spending from $50 to $300 or $400 per night.

B&Bs (bed and breakfast) often offer a better price than a hotel, homemade breakfast, and plenty of local flavors.

Airbnb is another popular option for travelers today offering to rent a room, a beautiful apartment, or the whole house. Renting an Airbnb is much cheaper and ideal for staying in one place for several weeks or even months. You can buy food at local stores and prepare it at home or ask your host for budget-friendly local places to eat. Every potential host has a profile with pictures of their accommodations and references from previous guests.

Debby and Michael Campbell have been traveling since 2013. They blogged about their travels at “Senior Nomads”. To help to budget their travels they stayed at over 270 Airbnb’s and called them home while traveling through 85 countries.

If you want to cut costs on lodging use vacation rental websites such as Airbnb and VRBO to stay in one place longer and cheaper.

Airbnb

VRBO

Another way to save money on lodging is house sitting or house swapping. It became very popular among travelers of all ages.

House swap or house exchange.

If you do not plan on selling your home, you can put it to work when you are away traveling. The typical house exchange is an arrangement where you swap houses with somebody else in another country or city. It is a great way to vacation if you want to stay in one place for several weeks or a month.

For example, I live in Boston and planning to spend three weeks in Madrid. If there is someone from Madrid who wants to visit Boston at the same time, we can do a house swap. That way, I will save money on lodging and get to experience a new city in Spain. Websites like Homestay.com and Lovehomeswap.com make it easy to find an available home and provide safety measures for your peace of mind.

Cut travel costs on transportation.

The cost of airline, train, and bus tickets, as well as renting a car or using a taxi, makes traveling expensive. But there are a few strategies you can use to make your traveling in retirement more affordable.

mini-bus on the road - cut the costs of travel in retirement

Airplane tickets became very expensive with an additional cost of reserving a seat, extra fares for check-in luggage, carry-on bags, food, in-flight entertainment, and more.

The best way to find a cheap flight is to compare prices. We use Skyscanner, Kayak, and Expedia to compare ticket prices and make sure we get the best deal.

Another tip is to avoid buying tickets on Friday, Saturday or Sunday – these days are the most expensive to book airline tickets. Wait until Monday, Tuesday, or Wednesday when there are not so many people browsing the internet to book the flights.

Even we are not retired yet, we always try to save money on airline tickets by flying during the middle of the week. We fly on Tuesdays or Wednesdays because no one wants to fly on these days and the airline tickets are the cheapest.

Another way to save money is to fly an early-morning or late-night flight. You can significantly cut the cost of your airline tickets if you choose to fly between 5 a.m. and 7 a.m. or after 8 p.m. Prices are also cheaper if you fly after the major holiday or on the day of the holiday. Once we flew back from Europe on the 4^th of July day and Boston airport was completely empty.

There are a few other ways to cut costs on airline tickets:

Let the airline choose your seat.
Bring your own food.
Do not purchase in-flight movies and TV shows.

Once you get overseas, you can save money on popular budget airlines like Ryan Air, Easy Jet, or Wizz Air. You can fly between European cities for as low as fifty dollars.

Traveling in Europe is wonderful because just within a few hours you can be in another country. If you do not want to fly, you can choose fast and reliable public transportation such as a train or bus. If you are on a tight budget, buses are almost always your cheapest option. Reclining seats, Wi-Fi, clean toilets allow you to travel in related comfort if you do not mind spending hours on a highway.

Trains, unlike buses, go straight through the countryside. So instead of staring at the never-ending highway, you can see more of the quaint towns and scenic landscapes.

But traveling by train can cost more than by bus unless you have a rail pass or book your tickets a few weeks in advance. The best way to buy European train tickets is through websites like Trainline, Omio, or RailEurope.com.

For example, if you travel around Italy, the high-speed train tickets will be more expensive (around 50-70 euro per ticket) than Italy’s regional trains.

Rick Steves gives the great overview of Italy rail passes and train tips.

Cut travel costs on food.

Food is another big travel expense. Eating out three meals a day or just dining at fancy hotel restaurants can take a big bite out of your travel budget. According to Business Insider reports, you can expect to spend an average of $71 per person at the fine dining restaurants (think ‘The Capital Grill’) and that does not include tax and tip.

Most people like to have pleasant dinner with appetizers, entrée, and dessert and splurge on expensive wine or cocktails. However, many restaurants have the same menu for lunch and dinner, but they mark up their prices for dinner.

One of my favorite ways to save money on food while traveling is to eat a big lunch. Eating a bigger lunch will fill you up, and you can still have a small and affordable dinner at the end of the day.

variety of snack on table - cut the costs of food on retirement travel budget

Another way to cut travel costs on food is to go and shop at the local markets. You can make your own breakfast or cook dinner with fresh ingredients instead of spending money at an expensive restaurant. During our travels, we like to experience the local cuisine. That is why we prefer to find mom-and-pop diners or eat at local cafes and bakeries.

When we travel and stay in an Airbnb apartment instead of a hotel, I like to take advantage of the kitchen, refrigerator, and microwave. We typically eat breakfast at home, then go sightseeing and stop somewhere for a big lunch. At the end of the day, I will cook dinner and then we will go out to have a few drinks at a local bar. I have learned that eating out for every single meal puts a lot of pressure on your travel budget.

Cut travel costs on activities and entertainment.

No matter where you travel, there are so many things to do that will cost you little or no money at all. If you are first time in the city, check out the popular tourist attractions. Many historical buildings and sites do not cost money to view. Hiking the trails, spending time on the beach, or checking out nature usually does not cost you money. If you bring your own lunch and water, you can have an amazing day outdoors without paying a fortune.

Many cities offer free local walking tours. But you will need to do research and plan ahead of time to reserve your spot.

9 Best Websites to Book Free Walking Tours

Before going on a trip, I use a few websites to book our sightseeing or day tours and other activities:

Viator

Get Your Guide

Keep travel costs low and cut on buying the stuff.

When you travel on a budget in retirement, you should prioritize your spending. If you want to keep the travel costs low, choose to spend money on experiences rather than souvenirs or trinkets. When you are on the road for many months, you do not need to own many things. You can save a lot if you cut on buying the stuff and focus on experiences and living life.

When you experience something, you create longer-lasting memories. Browse local markets without buying anything, take a photo to preserve your travel memories, and post it on Instagram or Facebook.

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Final Words

As you can see, there is a lot to think about traveling in retirement. Whether it is a short road trip or a long journey around the world, you need to prepare for it thoroughly.

Are you planning to travel during retirement? How do you budget for your travels?

Do not forget to share this post if you liked it!

Checklist for Retirement Planning in Your 60s

by Maggie Leave a Comment

woman making notes at table outdoor - retirement planning in 60s

When you are in your 60’s you know that your retirement is around the corner. Getting closer to the retirement date can be both exciting and stressful. Everyone wants to have a happy and comfortable retirement.

But when you have a limited number of remaining years you need to take time to understand your retirement picture. You do not want to be one of those people who want to retire, but when that day finally arrives, they just let it happen. You want to be smart and invest time in planning and preparing for a big day. Before you take the plunge make sure that you are ready!

Here is a checklist of helpful steps to take for people in their 60s who plan to retire in the next 5 to 7 years:

1). Understand your retirement lifestyle.

Before talking about finances, I want you to answer the following questions:

Where do I want to live in retirement?
What do I want to do in retirement?

Answering these questions is important because it will determine the cost of your retirement. Most people already have a vision of their next phase of life. But not everyone goes into the details of planning it.

Think about retirement in stages. Your early years of retirement are going to be the most active. Then you will settle down and face a slowdown in your activities. Your retirement lifestyle will determine the cost of your retirement.

For example, I love to travel and have a long bucket list of places I want to see and countries to visit. plan on traveling the world when we retire. Once we retire, we are planning to spend half a year abroad traveling. That will take a significant amount of money to cover our travel expenses. But we already have determined a retirement budget for the first 5 years of our travels. Eventually, we will slow down and start spending more time at home. Going on one or two big trips a year will be all we can afford to pay for the cost of traveling.

Being in your 60s is an ideal time to look at your retirement plans. You are close enough to retirement to have a realistic idea of how you want to spend your golden years.

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2). Finalize your income and expenses.

Once you have a picture of your retirement lifestyle you need to finalize your financial assets and see if you have enough money saved to pay for this life.

Income

Financial experts suggest that you need about 80 percent of your pre-retirement income to maintain the same standard of living in retirement. Suppose my current annual income is $60,000. Multiply that number by 80 percent ($60,000 X 0.8 = $48,000). So, I will need around $48,000 in retirement to live the way I do today.

This number is a good rule of thumb if you do not plan on making any major budget changes when retire. However, not all retirees spend less in retirement. And if I have expensive hobbies like traveling, I will need a higher number.

Now when you are close to retirement, the rule of thumb “80 percent of pre-retirement income” should be replaced with real numbers. This number should include your daily living expenses and the money you want to spend on hobbies and activities.

Sources of retirement income:

When you are working you probably have a single employer and a single source of income – your salary. In retirement, everyone has different sources of income. As a retiree, you receive income from multiple sources:

Guaranteed income:

Social Security
Pension
Annuity – a guaranteed income you must purchase yourself

Other sources of income:

Part-time job
Rental income
Business
Dividends

Income from your retirement funds:

Tax-deferred accounts – 401(k), IRA
Tax-free – Roth IRA, Roth 401(k)
Taxable investment accounts
Taxable bank checking and savings accounts

While working, you receive a paycheck regularly – probably every two weeks. When you retire, you might receive income monthly, quarterly, annually, and even irregularly. Getting a clear picture of your retirement income should help to make sure that you have enough money to cover all your living expenses.

Expenses

I know nobody likes to read about budgeting. But the best advice is to create an estimated retirement budget based on your current and future expenses. You might have a general idea of what you spend now. But you will be better prepared if you have a clear picture of your expenses now and how that might change in the future.

When you retire you do not need a lot of things that you did when you were working. The costs of commute, take-out lunches, and business clothes will go down. But you will start spending more money on travel, hobbies, and activities. And your medical expenses will increase with time.

lake-boats-flowers-retirement planning and retirement expenses

It is important to include big-ticket expenses into the retirement budget as well. Paying for a wedding, buying a new car or a lake house will require a significant amount of money withdrawn from your retirement funds.

If you do not know how to create a retirement budget or organize your finances for retirement, I recommend reading my articles:

3). Minimize your debt.

When you are in your 60s make it a goal to pay off your credit card debt, student loans, car loans, home equity loans, and any personal loans before your retirement date. Do everything you can to retire debt-free and even pay off your mortgage if possible.

When you stop working and start living on a fixed income you will need to stretch those retirement dollars as far as you can. How can you enjoy your retirement if you must spend a portion of your retirement income to make mortgage or debt payments each month?

Credit cards

If you are carrying a high-rate credit card debt you are putting a lot of pressure on your finances. There are two most popular debt payment strategies – the snowball strategy and the avalanche strategy.

The snowball strategy works by paying off the credit card with the smallest balance and then working your way up until all credit card debt is settled. The avalanche strategy allows you to pay off your highest interest rate debt first and then work it down. I recommend focusing on your highest-interest debt first because the longer it takes you to pay it off, the more money you will pay towards interest.

And if you can help it, do not add any more debt to the pile while paying off old debts.

Over the years Roman and I have accumulated $170,000 in debt – car loans, student loans, construction loans, and medical expenses. It took us 21 years (from 1999 to 2020) to pay them off. The only debt we have left is the mortgage. We try to increase our payments towards the principal. Recently, we refinanced but I do not think we will finish paying it off in full before we retire.

Mortgage

When you are in your 60s, one of the smartest things you can do is to pay off your mortgage before you retire. A mortgage-free retirement is usually best because you can spend more money on the fun stuff. Retirees often have to withdraw money from their retirement funds to cover their mortgage payments.

Unfortunately, those withdrawals typically trigger more taxes. That is why it is better to pay down your mortgage while you are still working, so you can keep your housing expenses low.

Look at your mortgage balance and try to figure out how much extra you can put toward your mortgage each month. Those extra payments can reduce your principal balance significantly. Also, instead of sticking with the traditional monthly payments, you can start making bi-weekly mortgage payments. In addition to that look into refinancing your mortgage to get a lower rate and to reduce your monthly payments.

However, for many people paying off the house is not financially possible. When a payoff is not feasible, you should reduce mortgage debt by refinancing it. We recently refinanced our mortgage with AmeriSave Mortgage Corporation at 2.5 percent. It helps to lower our monthly payments and save us $500 a month.

When you are in your 60s, getting out of debt should be your priority. At this age, you have to make the most of your remaining years in the workforce to increase your retirement savings within the next 5 to 7 years.

I recommend reading my article:

How to Pay Off Debt Before You Retire

4). Maximize your retirement savings.

When you are only a few years away from retirement, being short on retirement savings can be problematic. The best option is to start spending less so you can put more money into your retirement savings.

Whenever possible, increase your retirement contributions up to the maximum allowed in retirement plans such as 401(k), IRA, and Roth IRA.

The 2021 contribution limits are:

$19,500 for 401(k) retirement plans. And if you are age 50 or older, the catch-up contribution is an additional $6,500. So, you can save a total of $26,000.
$6,000 combined contribution for traditional IRA and Roth IRA. And the catch-up contribution for people age 50 or older is $1,000. So, you can save up to $7,000 with your pre-tax money (IRA) and after-tax money (Roth IRA).

When you are getting closer to retirement, maximizing your traditional 401(k) and IRA accounts is important but not always enough. While you are still working you can make it a priority to save even more money in your Roth IRA account, emergency fund, and perhaps taxable investment funds if possible.

Another way to increase your retirement savings is to work longer. The goal is to make the most of your working years. You need to maximize the time you have left. Earning an income for a few more years could improve your financial security in retirement.

I am sure you may not like to hear this, but the fastest way to save more money for retirement is to cut your expenses. If you start practicing how to curb your spending and live on less money today, it will make your life easier in retirement.

Many people in their 60s enjoy the life of empty nesters. When the kids are gone, they start spending more on luxuries. It is easy to get used to a luxurious lifestyle, start spending more and saving less. However, it will be tricky to save money and even to retire if you let your spending get out of control. After all, the less you spend the more you save.

5). What is your retirement income plan?

After decades of earning and saving money for retirement, you need to shift gears and start spending what you have saved. And being just a few years away from retirement date is the best time to find out how much income you can pull from your nest egg.

There are three sources of your retirement income:

Social Security
Pension income (if you are the lucky one)
Income from your investments and savings

When you stop working you need money to pay for your retirement expenses. After you retire, you will receive Social Security payments. But that will be only a portion of your retirement income. You will start receiving payouts from your retirement savings.

But you will have to figure out a strategy of how to withdraw money from your retirement funds. This withdrawal strategy should give you the income you need from your first month of retirement through your 80s or 90s.

The “4% rule” is a well-known rule of thumb and a good starting point. According to this rule, you can withdraw 4% of your account balance.

For example, if you have $500,000 saved in retirement funds you can withdraw 4% of that amount – $20,000 in the first year of your retirement. You can adjust that number every year for inflation but following this rule should help you not to run out of money for at least 30 years.

Though, you have to be aware that there are a few problems associated with following this rule:

Return risk – the risk of earning smaller returns than it was in the past.
Longevity risk – the risk of living a long time and running out of money at the end of your life.
Series of return risks – the risk of a market downturn during your early withdrawal phase.

Even it is not perfect, the 4% rule is a good starting point you can adjust with time.

Related Articles:

6). Decide how to cover medical expenses.

You will become eligible for Medicare at the age of 65. If you plan to retire before age 65 you will need to find a separate plan to cover your medical expenses.

Your health insurance provided by your employer ends when you stop working. Even though your current employer promise to cover your health insurance in retirement does not mean they will not change their mind in the future or reduce coverage significantly. Thus, you will need to find and buy your health insurance coverage. Individual health insurance is expensive and could cost more than $1,000 a month. Make sure to shop around for the best prices.

Even being eligible for Medicare brings its own set of challenges because it does not cover all medical expenses. Medicare does not cover premiums, deductibles, co-pays for doctor visits, dental and vision care, long-term care, personal care, and other expenses. This means you need to include healthcare costs in your retirement budget.

7). Protect yourself and those you love.

Have you thought about how to protect yourself as you age and how to help your family care for you if you need it? When the time comes that you need assistance who will manage your finances, your medical care, and your regular day-to-day life? I understand that these are difficult topics to discuss. But it is a part of reality to grow old. And if you love your family you will plan for it, so your loved ones will not struggle and may have to scramble to care for you.

I write often in my articles about the cost of medical expenses in retirement. I want to remind my readers that healthcare is the second biggest expense in retirement after housing and you need to plan for it. Medicare is not free. It does not cover all your medical expenses and does not pay for long-term care.

Long-term care insurance is the most recommended way of planning for future expenses. It will cover nursing homes, assisted living facilities, and in-home care. It will help you not to be a financial burden on your family if that time comes. And you do not want to leave your husband or wife with nothing because the entire nest egg was used up taking care of you.

8). Think of tax strategies.

In retirement, we still need to pay taxes, but not all sources of income are taxed the same.

American dollars on a table - prepare tax strategy in your 60s

Withdrawals from tax-deferred accounts such as 401(k) plans and traditional IRAs will be taxed as an ordinary income. Withdrawals from Roth IRAs and Roth 401(k) plans will be tax-free. If you want to withdraw money from taxable investment accounts, you will have to pay capital gains taxes.

In addition to taxes, you need to remember about required minimum distributions (RMD). You will face this requirement when you reach the age of 72. By the US tax law, you are required to start taking withdrawals from your retirement accounts such as 401(k) and IRA (excluding Roth IRAs). The amount you must withdraw will be determined by the IRS. If you have more than one retirement account, you can withdraw money from each account or total RMD from just one account.

It is important to remember that your RMD withdrawals might push you into a higher tax bracket.

Think about what tax strategies will work for you the best. If it makes more sense, you can roll your assets into Roth IRA before you reach RMD age. Another option is to start taking withdrawals from your retirement accounts before RMD kicks in so you would not face the sudden jump in taxes.

9). Reallocate your investments.

The last few years have been volatile years for financial markets. Many people pulled money out of the stock market. When you are close to your retirement date is tempting to stay away from stocks to reduce the risk of losing money in your retirement funds.

But keep in mind that stocks provide growth. And investing in growth is important at this stage of life. If you retire at 65 and spend 20 to 30 years in retirement, you need to have enough growth to make your money last that long.

Put it on your checklist to review your asset allocation and make sure your portfolio is diversified and invested for growth. What I am suggesting is to have a balanced mix of stocks, bonds, mutual funds, and other assets that fits your retirement goals.

Related Articles:

Final Words

Your 60s is a decade full of transitions. Perhaps your kids are out of the house, and you are thinking about downsizing. Perhaps you would like to relocate to a warmer climate. Medicare will kick in at 65 and you may also find yourself ready to leave the full-time job that defined so much of your daily life. Somehow you have to navigate the various transitions in this new period of your life.

Regardless of how you plan the transition to retirement, your most precious asset at this stage of life is your attitude. How you envision your future is everything. A positive attitude will carry you forward into the future and your golden years.

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Finding Your Purpose in Life in Retirement

by Maggie 4 Comments

woman-laptop - finding purpose in life in retirement

One of the challenges of retirement is finding your sense of purpose in life.

While we are working, the responsibility and commitment of work give us a sense of purpose and meaning. When we retire, we look forward to leading a more relaxed lifestyle. But many people often miss the feeling of being valued in the workplace.

The important thing to remember that just because you have retired from work does not mean you are retiring from life. Retirement is a huge transition where you have to refocus your energy into something different than your career. Think about the new lifestyle you will be walking into as well as if you are prepared for it.

Purpose and Meaning

In the past several years I have been talking to retired friends and reading blog posts about what has given retirees purpose and meaning in retirement. And what I have learned that finding a new purpose in life is a major undertaking. It takes quite a long-time to find how to replace a work-related purpose with something new.

Most people believe that preparing for retirement is all about saving money and building wealth. This is true because money and financial independence are a huge part of a solid retirement plan. However, it is not the only one. Understanding your personality and creating a plan for what to do with yourself may be just as important as saving in your 401(k).

So how to find a new purpose in life? Think about how to refocus your life by writing down your interests and things you want to do in retirement.

Some people might find their purpose in doing meaningful work like being a volunteer while others might find that their purpose is to help family and friends. Some people find their purpose is going away on a spiritual journey or helping others on a similar path.

Think about who you want to be in retirement and ask yourself:

What special talents or interests do I have? Am I a creative type?
Do I have a dream that I want to pursue?
What do I want to achieve?
What skills I can use to benefit other people?
Do I like to work at something I am used to, or would I prefer to face new challenges?
What would I regret not doing if I die?

As you gather your thoughts answering those questions, you can begin to outline what your new purpose in life might be. Look at retirement as a time for exploring, developing new skills, and trying out new interests and activities.

Pick one or two things from the list below and discover if they bring a sense of purpose to your life in retirement:

1. Hobbies in retirement

I believe that everyone has some interests that they were forced to put on the shelf during their working years. But retirement gives you a great opportunity to start over again by pursuing your passion. You should always stay active once you retire. Do not consider yourself as ‘retired from life’. Refocus your energy on learning something new and more interesting than your previous job.

People still enjoys traditional hobbies such as cooking, reading, gardening, coins collecting, building models, even antiquing. If you are not sure where you want to start, compose a list of old hobbies you have enjoyed but had to stop and what hobbies you have wanted to try. Try to choose hobbies with a good mix of activities – physical and mental ones. And try something outside of your comfort zone. Also, it might be fun to try something new with a friend or a family member.

Related Posts:

2. Travel in retirement

These days traveling is a number one goal for most retirees. Many people look forward to traveling after they retire because you are no longer is constrained by the number of vacation days you can take off. You can go whenever you want and for how long you want.

Many people (including myself) looking at retirement as the best time of our lives, a time for fun, adventure, and travel. I believe that one of the biggest benefits of retirement is the freedom to explore the world.

I have found it useful to create a bucket list. That is a list of things I want to do and see in our local area and other countries. My bucket list is always get updated with the name of new places, activities, recommended tours, dates of future travels, and more. Roman and I feel excited when discussing our travel plans, and the places we want to visit.

Today, the fact that people live longer has produced a new generation of adventures – senior travelers. They are bold, resilient, and enthusiastic about fulfilling their childhood dreams. Professional obligations, family life, and financial concerns prevented them from actually doing it. But retirement brings freedom and they do not wait any longer to explore the world.

3. Health and fitness in retirement

Finding your sense of purpose in retirement often comes with staying in good health.

park-woman -bicycle-purpose in life in retirement

During the years of working and raising a family, it is so easy to let your fitness slide. There is not enough time for everything so many of us allow our weight and diet to decline. But once you have retired you will have plenty of time to improve your physical health and fitness.

Stay in shape.

There are still many retirees who spend days lying on a couch watching TV and snacking. Some people gain weight during retirement because they are not active, and began to eat more out of boredom and depression. Overweight and lack of exercise put retirees at great risk of many chronic diseases such as diabetes, stroke, cancer, and heart disease.

But you can get into shape with a healthy diet and regular exercise. Exercise can take many forms – jogging in the mornings, hiking in the woods, biking to the grocery store, taking yoga classes, swimming in the lake. Try to choose an exercise activity that you enjoy so you can stick to it for a long time.

There are many books and videos that you can use for working out from the comforts of your home. But if you want to exercise with others you can join a gym and take group fitness classes. Do not be afraid to try something new such as Pilates, Kickboxing, or Zumba.

Another good idea for staying in shape is to hire a personal trainer and learn new techniques for improving your overall well-being.

Stay in good health.

Maintaining good health is often a number one goal in retirement. Do not wait until something is wrong to visit your doctor. Take a preventive approach and have your regular health check-ups and screenings, so if any problems get caught early you can do something about them.

4. Working in retirement

If you still find that you miss working, there is no reason not to make work your new hobby as long as you find it enjoyable and not stressful.

Part-time jobs

Working part-time in retirement can be a great way to feel fulfilled. Even though your official full-time career has ended, it does not mean you have to stop working completely. The surveys show that many retirees prefer to work part-time jobs to stay busy, socialize with people or simply pursue their lifelong passion.

The Bureau of Labor Statistics predicts that a growing number of the labor force (164 million people by 2024) will have 13 million workers aged 65 and older. Many retirees have enough money to cover their living expenses in retirement. But many others who prefer to take on a part-time job for extra income or to cover the shortage of retirement savings.

There are plenty of part-time jobs for seniors including tutoring jobs, consulting jobs, service jobs, and more. Part-time jobs provide you with extra income and still allow you to enjoy more free time, travel time, and indulge on your hobbies.

Here are some options for the part-time jobs for retirees from the AARP article:

Top 25 Part-Time Jobs for Retirees

Small business

If you are planning to start your own business in retirement, you are not alone. According to statistics, the highest rate of entrepreneurs is in the 55-64 age group. For many people, being retired does not mean never working again. The most popular types of business these days includes consulting services, and freelancing.

coffee shop - purpose and meaning in life in retirement

Whatever business you are planning to start make sure you do something you passionate about. To start a new business will require a lot of time, money, and effort over a prolonged period. You need to be passionate about the product or service you are offering to make your business succeed. Otherwise, you will lose the excitement when faced with challenges fast and will not be able to carry on.

5. Giving back to the community in retirement

Many people choose to give some of their time to charity work and volunteering. Many of us feel the desire to give back to the world in gratitude for the opportunities we had in life. This is a great way to find your purpose in life and stay busy and valued. You will have a chance to meet new people and feel good about yourself while contributing to the community.

Countless groups and organizations are looking for an extra hand and might not have money to hire the help they need. If you need to find an organization, think about what you are passionate about and what matters to you the most. You can volunteer by sitting on Board of Directors, helping renovate housing, tutoring children, or organizing events and fundraisers.

Some great options are to volunteer at a homeless shelter, animal shelter, local hospital, church, and library, or teaching to share your knowledge. Offering your time and assistance to those in need will give you a great sense of purpose and making the world a better place to live.

One of my friends is passionate about helping seniors in her local community. She teaches nutritional training class “Successful Aging” at several senior centers. Currently, she is focused on raising funds for the creation of an Outdoor Recreation Area and Shade Pavilion so older people will spend some time outside in nature and feel less isolated and lonely.

6. Caregiving in retirement

Many people choose to become a caregiver to take care of aging parents who need help with their lives. I know a few neighbors who are taking care of their grandchildren and a friend who retired early to become a caregiver for her disabled brother.

These situations are very common. We all hope for long and healthy lives for our family, but there are times when our loved ones need our help. Becoming a full-time caregiver is not an easy decision and it may affect your lifestyle. But most caregivers take on this new role out of love and good intentions.

Final Thoughts

Retirement is not a one-time event. It takes place over time, and we need to develop new interests, explore different parts of ourselves, and form new identities.

Everyone is different. Your retirement should be about you. And what other people find rewarding and enjoyable might not appeal to you. So, keep looking until you find something that you are passionate about and it adds meaning and purpose to your retirement life.

We would love to hear from you! Do not hesitate to share your thoughts about finding a sense of purpose in retirement in the comments below.

Do not forget to share this article if it helped you!