Planning for retirement should not just be about how to pay your bills once you retire. You have worked most of your adult life, and chances are, you have been waiting for retirement to come. Take advantage of the time away from work to do things that you have always wanted to do and enjoy the activities you love most. Though it is important to save for regular expenses, such as healthcare, housing, and transportation, be sure to set aside some funds for fun activities as well.
It’s important to enjoy the good things in life once you reach retirement.
The Key to a Happy and Healthy Retirement
There is more to living a happy and healthy retirement than just having the funds to pay your bills. The Study of Adult Development from Harvard University found that the keys to living a healthy life in retirement are:
- Getting regular exercise
- Making new friends
- Constantly learning new things
- Finding new meaning outside of work
Though it is easy to get caught up in making financial plans for retirement, it is vital that you also make plans for fun activities after you are no longer working or just working part time. These are the things that will give you purpose outside of your career and help you live a happier retirement.
Find Purpose and a Daily Routine for Retirement
Dan Buettner, author of “The Blue Zones: 9 Lessons for Living Longer,” comments on the importance of having a purpose after retirement: “You graduate, get a job, get married, and have kids. But then you stop working and lose the thing that gets you up every morning. Finding what gets you out of the easy chair is every bit as important as having a physical fitness plan.”
Study after study show that having a reason to be living — a reason to get out of your chair — is a vital part of having happiness. And it can be even better if that purpose provides you also with a daily routine. Having somewhere to go on a regular basis is also proven to help keep us healthy and engaged. They say that the regular routine is something that makes work so useful to our overall well being. However, in retirement, you might shift that routine to something even more enjoyable — daily exercise or coffee with friends.
Retirement is the best time to enjoy what you love doing most.
How to Estimate Income in Retirement
When you’re planning for leisure activities and travel in retirement, it is important to consider how much estimated income you will make and can spend each year. According to MarketWatch, if you want to successfully fund your retirement long-term, including both the needs and the wants, you will want to determine how much you can safely spend each year. The best way to calculate this “safe” withdrawal rate is to conservatively make assumptions for the following three big unknowns:
• How long you and your spouse are going to live
• The rate of inflation during your retirement
• Your portfolio’s rate of return during retirement
Though these numbers may be unknown, financial advisers suggest that a healthy 65-year old couple plan for a 30-year retirement with expenses increasing annually at a 3% rate of inflation. When it comes to your portfolio’s return on investment, this is something that you may not be able to make assumptions about, but you can review each year with your financial adviser. Knowing the amount that you can safely spend each year will help you determine how much extra money you have for leisure activities.
An easy way to estimate your living expenses — and calculate for inflation as well as many other variables — is to use one of the best retirement calculators. The NewRetirement Retirement Calculator was developed with input from Nobel Prize winning economists. You put in your personal information and the system does hundreds of calculations for you to help you know what you have now and what you will have in the future.
Make sure you set aside some “fun funds” when planning for retirement.
Retirement is the ideal time to enjoy spending time doing the things that you love most. Though retirement planning can sometimes be overwhelming, it is important for your future health and happiness that you set aside some funds for leisure and travel when planning for retirement.
