3 Strategies to Make Retirement One Long Vacation

Mike Gann Financial Planning, Retirement Planning

It’s vacation season! Where are you travelling to this summer? Are you headed to the beach to soak up the sun and enjoy the waves? Or are you more of a lakes and mountains person? Perhaps you’re travelling to historical sites or a favorite national park.

Whatever your vacation plans may be, there’s no doubt that it’s nice to get away, relax, and recharge. If you’re like most people, you probably dread the end of your vacation and the return to the daily grind.

Fortunately, there’s a light at the end of the tunnel. Retirement is your opportunity to leave the working world behind and live life on your terms. You can hit the beach, the mountains, the golf course, or pursue any other activity that you enjoy.

Of course, to truly live life on your terms in retirement, you’ll need a strong financial foundation. If you don’t have the right strategy in place, you may not have the means to enjoy your golden years. Below are a few tips to consider as you approach retirement. Implement these ideas and your retirement can be one long vacation.

Use a budget.

According to a recent study from Debt.com, 33% of Americans don’t use a budget.1 If you’re among those who do use a budget, you’re off to a good start. However, if you don’t use one, now may be the time to start doing so.

A budget is one of the most powerful financial tools at your disposal. You can use it to track your spending and make informed purchasing decisions. Your budget can keep your spending under control so you can boost your savings.

A budget can also be helpful when you enter your retirement. You’ll likely enter retirement with more assets than you’ve ever had. It can be tempting to spend that money on vacations, shopping, dining out, and more. Retirement can last several decades, though. If you spend too much in the early years of retirement, you may not have enough assets left in the later years. A budget can help you control your spending and make your assets last.

Create guaranteed* income.

One way to preserve your assets is to develop income streams that cover your expenses. If you have enough guaranteed* retirement income to fund your regular expenses, you can use your savings to fund discretionary costs like travel.

Social Security is a common source of guaranteed* income. If you’re fortunate enough to have a defined benefit pension, that can also be a source of guaranteed* lifetime income. However, you may need additional income to cover your expenses.

An annuity may be an option to consider. There are several different types of annuities you can use to generate guaranteed* income. For instance, some annuities offer a guaranteed* withdrawal benefit. Your funds have the potential to grow and you can withdraw up to a certain amount each year. As long as you stay within the withdrawal limits, the income is guaranteed* for life. This kind of guaranteed* income can give you financial predictability and certainty.

Minimize risk.

Nothing can derail your retirement plans like a costly emergency. For retirees, health care expenses can be especially dangerous. Fidelity estimates that the average retiree will spend $285,000 out-of-pocket on health care costs like deductibles, premiums and copays.2

You can take steps now to minimize those costs. For example, a health savings account (HSA) could help you pay for out-of-pocket medical expenses. Long-term care insurance could help you pay for extended care, either in your home or in a facility.


Also consider the importance of life insurance in retirement. If you have a spouse who is dependent on your defined benefit pension benefit or other income, life insurance could be a key risk protection vehicle. If you pass away, your spouse may face serious financial challenges, and that could limit their ability to enjoy the remainder of their retirement.

Ready to plan your ideal retirement? Let’s talk about it. Contact us today at Advantage Retirement Services. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

1https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019—-although-they-think-everyone-else-should-300824384.html

2https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

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19007 – 2019/6/27