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There are many, many factors that play into planning for a person’s retirement years. Obviously, you want to ensure you have enough money saved to meet your needs, but there may be other important objectives too, like being able to afford to travel or leave a financial legacy to your family.
Another goal that should be considered by seniors planning for their retirement is how they can make the eventual transition to the later phases of retirement as manageable and life-affirming as possible — though not everyone thinks about this (or wants to think about it), so proper planning is sometimes neglected.
What exactly is meant by “life-affirming”?
If you look up “life-affirming” in the dictionary, you’ll find a definition such as, “something that makes you feel positive about life” or “a way to describe an activity or attitude that emphasizes the positive aspects of life.” As such, the term is clearly quite subjective!
To some people, however, “life-affirming” speaks to feeling a sense of purpose and joy, regardless of your stage of life or your abilities. At its root, it means that each person’s life has value and meaning, but it is closely tied to embracing a positive, optimistic mindset as well. Take a moment and consider what gives you a sense of purpose — what it is that makes you feel your life has value.
A life-affirming approach to retirement planning
To simplify and demystify their client’s retirement planning tasks, some financial planners break the process down into phases, with each stage having unique characteristics and action items related to lifestyle and housing preferences.
As part of your unique retirement plan, it is also important to take into account what a person values — beyond just money — as this will help ensure that your retirement years are as life-affirming as possible.
Phase 1: Accumulation
The Accumulation phase — the longest of the retirement planning phases — begins when you enter the workforce and start to save money for your retirement.
It can be difficult for some people to save a lot during this period of life when they might be paying off a student loan, buying a home, and/or starting a family, but it’s a time when every penny saved counts, thanks to compounding interest.
Phase 2: Pre-Retirement
Although the timeframe for the start of the Pre-Retirement phase can vary, it usually begins around 15 years before you plan to retire, so in most cases, when you are around 50. This is technically still a continuation of the Accumulation phase, since you are still earning a paycheck, so you want to be sure you continue to put enough money into your retirement savings during this phase.
There are other planning considerations that should begin during this phase, as well, such as discussing your savings projections with an experienced financial advisor, beginning to learn about long-term care insurance and the ins and outs of Social Security and Medicare benefits, and considering where you want to live during retirement.
This is also a good time to begin to ponder what “life-affirming” means to you and how you want to spend your time in retirement. What brings you joy and makes you eager to get out of bed in the morning? What makes your life feel worthwhile and meaningful? Maybe it’s seeing the world and experiencing new cultures. Perhaps it’s a beloved pastime like tennis or woodworking. Or it could be as simple as savoring time with loved ones.
When you identify what it is that sparks joy and brings meaning to your life, it can help you properly plan to ensure those priorities are financially feasible for you.
Phase 3: Early Retirement
When you collect the paycheck from your final day in the workforce, you have entered the Early Retirement phase. This phase will continue until a person retires, typically between age 65 and 70, although retirement may be more of a moving target today than it was with previous generations. It is during this phase of retirement that you can fully embrace whatever pastimes are most important and life-affirming to you, whether that means travel, hobbies, volunteerism, time with friends and family — or even an encore career!
This also is the phase during which you will likely begin to draw on the money you have been saving for all of those years, which may necessitate some adjustments to your budget depending on where you’ve decided to live and other retirement-related expenses like travel and health insurance (such as various Medicare options). An experienced financial advisor can help ensure you are staying on track to protect your long-term financial security and also can advise which savings are most tax-efficient to draw from first.
Phase 4: Mid-Retirement
The Mid-Retirement phase typically begins around your mid-70s, primarily because if you have saved in a tax-deferred retirement account like an IRA and/or 401(k), then you need to begin properly withdrawing required minimum distributions (RMDs) at age 70 ½. It’s important to work with a reputable financial advisor, along with an experienced CPA, to ensure you are making these withdrawals in the most tax-efficient way possible.
This phase of retirement lasts for as long as you are safely able to live independently, so the length can vary greatly based on a person’s health, genetics, and lifestyle. (It’s Important to note that this can change quickly and unexpectedly in some cases, such as with a stroke, heart attack, fall, cancer, early onset dementia, etc., which is why planning is so important.) But this is also the phase when you should educate yourself and make decisions about where you want to live as you grow older: in your current home, in a different home, or in a retirement community.
As part of this senior living decision, you should ponder (and discuss with your loved ones) what life-affirming care might look like for you — for instance, where you would want to live and who you would want to care for you if you should be among the 70% of seniors who eventually requires care services.
Phase 5: Late Retirement
The Late Retirement phase begins if and when a senior’s health and/or mobility declines to the point that they require extensive help on a daily basis to care for themselves and it is not likely that their health or mobility will improve.
Seniors who have adhered to the first four phases of the retirement planning process will likely be in a position to better manage the challenges that can arise during this stage of life — both financially and logistically, and perhaps even emotionally. This includes making well-informed decisions about housing and care options, and having a plan in place, which has been shared with loved ones, about personal preferences for what life-affirming care means to them should their health deteriorate or mobility decline.
At this stage, certain aspects of life are not always left up to the individual or are beyond their control, which is why it becomes increasingly important to consider how they are treated and cared for. Is it life-affirming care that takes their preferences into consideration? Is the person respected and valued for who they are and what they have accomplished in their life, rather than being treated as an “old” or “disabled” person?
The importance of life-affirming care for seniors
There is beauty, value, and purpose in every human being’s existence, no matter what stage of life they are in, which is why all people deserve life-affirming care as they age. What might life-affirming care look like? As with a person’s individualized definition of “life-affirming,” a description of life-affirming care might vary from one person to another.
Take for example someone who has lost mobility. For one person, life-affirming care might mean that they have the appropriate assistance needed to dress, have transportation, and attend services at their long-time house of worship. For another person who loves cooking and baking, life-affirming care might mean they can have accommodations made to their kitchen — such as lower counters and appliances — that allow them to continue to safely cook.
Tailoring a senior’s care to enable them to continue to feel valued and enjoy the most important aspects of their life should be a major priority of retirement planning and particularly when planning for the Late Retirement phase. Further, life-affirming care and services should be a priority at any top-notch senior living provider.
If you are considering a move to a senior living community, such as a continuing care retirement community (CCRC, or life plan community), discuss with them what they do to ensure their residents receive the personalized life-affirming care that every senior deserves.
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