Are you planning on enjoying an active retirement? If so, it may cost you more than you think.
On this episode of Retirement Starts Today, I interview Thatcher Taylor, the financial advisor behind ProPathFinancial.com. Thatcher and I discuss how to prepare financially and mentally for an active retirement.Living an active lifestyle could end up costing you more money than you expect. Click To Tweet
Outline of This Episode
- [1:42] How to navigate the balance between
- [3:18] How plan for a longer retirement
- [9:00] A phased retirement plan could help you stay active
- [11:55] Do you have a sense of purpose in retirement?
- [18:33] Check out Thatcher’s YouTube channel
How an active lifestyle could cost more money
Choosing an active lifestyle vs. a sedentary one isn’t as clear as black and white. We all know that an active retirement will keep you healthier, so we think that, in turn, it will be less expensive.
While it is true that staying active will help you stay healthy and could decrease your medical expenditures. Living an active lifestyle could end up costing you more money than you expect. Even though an active lifestyle can keep you healthier it could cause you to live 5-10 years longer. Those extra 5-10 years of life will cost you an extra 5-10 years of income at the back end of retirement. In addition, an active lifestyle means that you may be traveling more or incurring the costs that those active hobbies bring.Those extra 5-10 years of life will cost you an extra 5-10 years of income at the back end of retirement. Click To Tweet
How to plan financially for an active retirement
It is important to carefully plan for an active retirement, so you may want to work longer to fund those extra expenses. Working longer could reduce how much you take from your investments and may give you the confidence to take more risks. In addition, a phased approach or part-time retirement will give you an opportunity to balance fulfilling work with an active retirement.
However, if you decide to retire early, you may want to invest more now so that you can have more options. It’s important to understand how to supplement your income before you are eligible for Social Security. It is also important to carefully consider when to take Social Security. If you are in poor health, you may want to file earlier. However, if you plan to live longer, you’ll want to maximize your Social Security payment by delaying your benefit as long as you can.
If you’re worried about investing aggressively, remember that the money that you invest now won’t be used for 20-30 years down the road. Increased longevity means that you will have more opportunities for long-term investing which means that you can assume more risk.
It’s important to map out your investments with an income distribution strategy. Whether you choose to use a bucket strategy, guardrails, or the 4% rule, having a strategy that works for your risk tolerance is important.If you aren’t in great shape now, but still want to focus on your health, then watching your nutrition can be the perfect way to start. Click To Tweet
What can you do now to physically prepare for an active retirement?
We all know that we lose muscle mass as we age. This is why it is important to incorporate strength training so that you can have a strong skeletal structure to carry you into old age.
If you aren’t in great shape now, but still want to focus on your health, then watching your nutrition can be the perfect way to start. Cut out the junk food that comes with the Standard American Diet and start eating lean meats, fruits and vegetables, and nuts and seeds. Incorporating a healthy diet now can help you get your body ready for fitness.
Mentally prepare for an active retirement
Many people, exhausted from life in the corporate world, take the first opportunity to retire without considering what they will do when they get there. It is important to cultivate a sense of purpose before you retire.
Don’t wait until you put in your 2 weeks notice. Start planning your retirement purpose now. With anxiety, depression, and loneliness rampant among retirees, it is integral to your mental health to make sure that you are retiring to something rather than away from something.
Listen to this interview with Thatcher Taylor to hear all the ways that you can holistically prepare for a long and active retirement.
Resources & People Mentioned
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