Choosing the Right Location and Community
The time to start the process of selecting a location, whether in an active adult community or other type of community, is several years before retirement. During those years, vacation trips can include visits to potential locations and communities. When the time comes, a fully informed choice can be made, and mistakes avoided. As choices narrow down, it’s a good idea to arrange a trial stay of a few days or longer, talk to others who live there, and take part in some activities.
Five Steps for Retirement Planning
- Start Early: You can’t make up for lost savings if you start too late.
- Fit expectations to reality: Prepare a budget with income and expenses to know where you stand.
- Follow your dream: Most are possible if you plan for it.
- Check out places to retire: Visit places while you are still working to find the one that fits your dream.
- Know what you are going to do all day: Don’t make the mistake of retiring without a direction or activities to keep you engaged with your interests & community.
A little more about these planning points…
Starting early
This means planning ahead for every aspect of retirement, from financial to what you will do every day. There are so many choices and so many lifestyles to consider. Where you will live, and in what type of community? Planning for how you will stay busy and productive after you lose the structure of your working world is worth planning for too.
Fitting expectations with reality
Review your checkbook and credit card bills to understand your current spending (your credit card statement might even list expenses by category). Then estimate your retirement income by reviewing your pension, 401k, Social Security, etc. Here is a link to the SS Administration’s Benefits Estimator to find out what you might expect from Social Security.
If money is going to be tight, cutting expenses earlier rather than later is key. Downsizing to a an easier to maintain and heat/cool home almost always makes sense. You’ll pay less taxes too. To supplement your income, turn a hobby into a business. Or consider what kinds of part time jobs you might find interesting. If you know where you stand before you retire, you have a chance to make adjustments in time.
Follow your dream
Retirement is a do-over on life. Seize the opportunity to follow your dreams, rather than being bogged down by inertia. Spend some time thinking about your ideal lifestyle, and how you can make that happen.
Check out places to retire
In your 50s or even earlier, think about what it would be like to retire in the places you visit for work, vacation, or other travel. While you are there, do a little exploring with your retirement mindset on. Visit friends who have retired and see what their lives are like. Rent a place and talk with real estate people and others in the community.
What you will do all day
Don’t be one of the people who retire one day with absolutely no idea what they will do the next. Start a hobby now or think about a part-time job – paid or volunteer. Dream about what you like to do.
Final Thoughts
You should actually have a 1, 5 & 10 year plan for retirement. You can’t start too soon, so start today and be sure to update your list on an annual basis incase things change. You may realize that while Florida looked great, you’ve decided it’s too hot and humid. You thought you wanted to be near the grandkids, but they just moved to the other side of the country. If you do decide on a location for your future retirement, it may be a smart investment to purchase your retirement home now and rent it out until you’re ready to relocate. For more information related to buying 2nd homes for future retirement be sure to check out our articles on Investment Purchases.
