Finding Financial Peace of Mind in Retirement—5 Easy Steps

In the recently released Stanford Center on Longevity report entitled, “Disconnected: Reality vs. Perception in retirement planning” which we briefly discussed in our post of October 7, 2022, the authors noted,

“While retirement planning is highly personal and dependent on many different factors, there is an almost universal desire for ‘peace of mind’ in retirement.”

Given this near universal desire, we thought it might be helpful to outline the five relatively straight-forward steps we think you should follow to help you find financial peace of mind in your retirement with the assistance of the Actuarial Financial Planner (AFP). 

The Most Important Retirement Planning Decision for Baby Boomers

In this short post, we will once again repeat what we believe to be essential retirement planning guidance from our late friend, Dirk Cotton. In two of his early 2019 Retirement Café blogposts, Dirk said,

“The most important decision you will make in retirement planning is how much of your resources to allocate to the upside and floor portfolios” and “The correct balance [between the upside and floor portfolios] will depend on how willing you are to risk losing your standard of living for the chance of having an even higher one.”

Hey Retirees and Near Retirees: How is Your Current Retirement Plan Planning Process Working Out for You These Days?

In light of lower-than-expected investment returns and higher-than-expected inflation this year, retiree and near retiree households are facing difficult financial decisions. These decisions may include;

• Can I afford to retire when I had planned?
• Can my spouse retire at the same time as I?
• Should our plan assume higher rates of inflation, and if so, for how long?
• Should one of us continue to work or plan to work part-time for a while?
• Should one or both of us postpone commencing our Social Security benefits?
• Should we reduce or defer our planned discretionary spending?
• Should we change our investment strategy, and if so, how? Should we make it more or less risky?
• Should we take our pension plan distribution in the form of a lump sum?
• Should we somehow tap into our home equity to supplement our retirement spending?
• Have we budgeted enough for future long-term care, future healthcare, future household repairs, etc.?
• Should we somehow reflect a possible future reduction in our Social Security benefits in our current spending budget?

So, how are retired and near-retired households making decisions like these?