What’s the best way to think about and plan for your retirement budget?
What do you do before you buy a car?
You take it for a test drive.
You have to see how it feels; if your elbow can comfortably rest on the window or how the headrest supports your neck or just the overall feeling you get on an open two-lane road. Test driving a car is important because you will discover both what you like and don’t like about the car which will help you in your search for the right one.
There are so many things we “test drive” in life before committing fully to it: dating before marriage, renting before buying, traveling before moving. Why should your retirement budget be any different?
Retirement is a new phase in your life, and it comes with many changes and challenges. Of course, your finances play a huge role in your retirement, but something that plays an equal part is your lifestyle. You’ve saved for retirement all of these years to support the lifestyle you’ve always dreamed of. Whether that’s living your golden years on a beach or remaining in your hometown. It all comes down to the life that you see for yourself and your family.
There are so many questions when it comes to your desired lifestyle: where you want to live, how you will spend your time, if you want to work, your proximity to your family, etc. All of these questions play a role in the kind of life you want to live in retirement. However, one thing is for certain: you’ll never know unless you try.
Testing your retirement lifestyle is a wonderful indicator if it will be the right fit for you. You may have always dreamed of living on the beach, but quickly realize that sand constantly being tracked into your house drives you crazy. If that’s the case, then you won’t be as happy as you would be if you simply had easier access to the beach as opposed to living on it. It’s these nuances that become crucial to your happiness in retirement.
When you take the time to test out your retirement lifestyle theory, you’re allowing yourself time to see what you like, and what you don’t like, so you can make adjustments to your plan before retirement even starts. Especially if you are thinking of changing your lifestyle dramatically, I strongly recommend taking time to test out the plan you have created for yourself.
Let’s look at an example.
How To Test Your Retirement Budget & Lifestyle
Now you know that testing your desired lifestyle is a good idea, but how can you put it into practice? Let’s keep the example of retiring on a beach and use the hypothetical persona, Laney.
Laney is a single mom and raised two beautiful children. She works in healthcare and is about 10 years away from retirement. The beach has always spoken to her, and while she hasn’t vacationed there as often as she would have liked, Laney always saw herself retiring on the quiet shores of Tybee Island. She thinks that a second home there would be a great way for her to enjoy the island life while also having a place for her children and grandchildren to visit.
How can Laney test if this is a good fit for her?
Since Laney is about 10 years away from retirement, she has some time to make any adjustments to her plan that she feels is necessary. Since Tybee Island has been a favorite vacation spot for her and her family, retiring there seems to make a lot of sense. But she hasn’t spent more than a week on the island. It would be best for her to spend more of an extended time there to see if she could really see herself living there full time.
Laney can rent a house, condo, or Airbnb at the beach for 2-3 months. This allows her to test the idea with less commitment and less expense. You can, of course, modify the length of time you want to spend in a place based on your situation, but the general principle is to spend an extended amount of time at your desired retirement location to see if it works for you.
You will be able to get a flavor for daily life: where you will get your groceries, the tourist levels, volunteer opportunities, community activities, and the overall way of life. This way you will be able to test both your lifestyle and budget. If your employer isn’t flexible about taking an extended period to work remotely from your potential new location, try breaking up your visit in shorter intervals. Maximize your vacation time by taking a few weeks over the course of the next few years at the potential location you want to retire to.
Lifestyle + Budget = Retirement
Your lifestyle and your budget are so connected in retirement, and it’s important to see how both work together in practice to ensure you live the best life you can in retirement.
Planning for retirement isn’t always easy, but it’s so rewarding to live the life you have worked so hard for. It’s my pleasure to work with you to help get you there. I would love to speak with you about ways to create your dream lifestyle in retirement.