There is something very unpleasant about the thought of retiring poorly. The idea of retiring and then having to go back to work because there is no money as you near the end of the month and you can’t find the money to do the things you want is bad, really bad. No one should approach retirement with that fear.
But how can you be sure you have enough to make it through retirement? Truth be told, no one can be certain of anything in this crazy, volatile world. Even the quality of tomorrow is in doubt, much less what life will be like ten, twenty, or thirty years from now.
Even though nothing is ever certain, you can take some basic steps to lower the risk of some problems, especially financial ones, during retirement. You have worked way too hard to let finances become the problem in your “golden years.” These are years meant to be the best.
I particularly like what Henry Durbanville wrote about his golden years and the views of those around him on aging. In his book The Best Is Yet To Be he wrote,
I feel so sorry for folks who don’t like to grow old…I revel in my years. They enrich me…I would not exchange…the abiding rest of soul, the measure of wisdom I have gained from the sweet and bitter and perplexing experiences of life; nor the confirmed faith I now have in the…love of God, for all the bright and uncertain hopes and tumultuous joys of youth. Indeed, I would not! These are the best years of my life…The way grows brighter; the birds sing sweeter; the winds blow softer; the sun shines more radiantly than ever before. I suppose ‘my outward man’ is perishing, but ‘my inward man’ is being joyously renewed day by day.
Wow, what a great word on growing old gracefully! So, let’s get there without missing an important detail or running out of money. As Durbanville says, let’s make these the best years of our lives.
Health insurance
Many employed people have health coverage through their employer. Some are insured and do not realize how expensive private health coverage, especially for a spouse or children below the age of 26, can be in the open market. Health coverage is one reason why many people are waiting until 66 to fully retire – that’s when they become eligible for Medicare.
Know the cost of coverage before you plan your retirement. Contact a qualified agent and get an estimate. As an alternative, WebMD has an online Health Insurance Cost Calculator that may be able to give you a start on an estimate.
Other insurance coverages needed
You will keep a car, probably as long as you can still safely drive. Some keep a car longer than that, unfortunately. You need to maintain coverage on the car at a minimum to the levels required by law and very likely beyond that. It does not take more than the slightest accident to result in a lawsuit you can’t afford to defend and likely don’t want to settle to get rid of it. You do not want your life’s efforts to go to a personal injury lawyer.
Your home or rental property still needs insurance, so those policies don’t change.
If you have life insurance, as you approach retirement, you need to re-examine the need for it. If it was an investment, it probably wasn’t the best investment and you might be able to cash it out and do better in the market. The real issue is whether you need the insurance for your spouse or family. That is a matter you and your financial adviser should discuss seriously.
There is another type of coverage you may wish to consider if you do not already have it and that is Long Term Care coverage. Nursing homes and in-home care is extremely expensive. For more details, see Long term Care Considerations, More on Long-Term Care and How Can I Afford a Nursing Home?
Keep budgeting (or start if you haven’t been budgeting)
Your spending patterns are going to change when you retire. Some things like commuting expenses, work clothes, etc., will decrease, but other things will increase, such as insurance costs, medical co-pays and deductibles, medication costs, travel expenses, etc. And don’t forget inflation which makes everything cost more. The last thing you need is the great big surprise that you are spending far more than you expected or can afford. A well-drafted and detailed budget can help you avoid that.
Idlewild offers classes that will help you develop a plan with your money and teach you God’s ways of handling it: Financial Peace University. Through video teaching, class discussions and interactive small group activities, FPU presents Biblical, practical steps to get from where you are to where you’ve dreamed you could be. Classes meet for two hours each week for nine weeks and are offered several times each year.
Wise budgeting is Biblical. Proverbs 24:3-4.
For more on cutting expenses, saving and starting a budget, see It’s Time to Start Saving and Your Financial Future by the Decade. Take your existing budget or create a new budget that is realistic and matches the retirement lifestyle you plan to live. Financial Peace University at Idlewild Baptist Church is a great tool to learn budgeting and better financial stewardship. Call Pastor Rob Taylor at 813-264-8717 or The Idlewild Foundation at 813-264-8713 for details.
Not as solid and not Biblical, there are online financial and budgeting aids available. You might try Intuit’s Mint or the tools at SunTrust’s ONUP.com.
Reconsider your estate plan
Retirement is one of those moments when you need to give serious thought to revising your estate plan. Your children may be old enough that they are financially stable and don’t need additional funds. Your grandchildren may be too young to be able to handle any sizeable sum without harm to them. See Are you going to give your kids money to burn? and Giving to Your Grandchildren for more details and a few ideas.
You also should be certain you have not left God out of your estate plan and final giving. Think back to the good breaks you have had. Even remember the hard times you grew through, the ones that made you stronger.
Ecclesiastes 7:14
14 When times are good, be happy;
but when times are bad, consider this:
God has made the one
as well as the other.
Therefore, no one can discover
anything about their future.
God has been faithful, probably more than you can fully appreciate. He deserves praise and worship – and our offerings as well.
If there have been any family changes, marriages, divorces, deaths, births, etc., you may wish to make adjustments in your will, trust or estate plan, if not complete changes. The time as you approach your retirement is a good point in time to start annual check-ups for your estate plan as well as for you look back at your past bequest decisions. Has anything in your family or your wishes changed? See A Few Estate Planning Pitfalls, pitfall number 3 and A Few More Estate Planning Pitfalls.
If you are one of the roughly 70% of Americans without a will, get one without further delay. Don’t try it at home or on the Internet. Yes, there are supposedly free wills available online. Free! And yes, you get what you pay for! If you are uncertain what attorney you should go speak with, give us a call at The Idlewild Foundation, (813) 264-8713. Doing it right is worth the time and expense. See A Few Estate Planning Pitfalls, pitfall number 1, and A Few More Estate Planning Pitfalls, especially Pitfall number 7.
If you are using beneficiary designations on investment accounts, on IRAs, 40(k)s, IRAs or bank accounts, check your beneficiary designations on all accounts and make certain your recollection is right and that the amounts are still what you want. It is easier to do this now rather than dumping problems onto your loved ones.
Figure out what to do with your time
It makes no sense that many people hate work as many do but when they don’t have to work, they get bored. Plan on serving God at your church, find a ministry that helps in the community in a way you can get passionate about. Develop, or strengthen, a low-cost hobby.
Why? Because you are, at least for a while, going to have a lot of spare time available once you are no longer working every day. However, after a while, you will likely catch yourself saying, “I don’t know how I used to find time to work!”
Maybe now you can find the time to read a few chapters of the Bible every morning (you have started doing that several times and stopped far too soon), exercise and finally lose some of that weight, get in better shape (you have said you would do that in how many New Year’s resolutions?), and relax a bit as well.
Look up the discounts
As the boomers are retiring, there are many “boomer-friendly” businesses and restaurants that give discounts to seniors. Learn where they are and much of your retirement can become 10 to 20% less expensive.
Is any of this fun or exciting? Not much, but neither is being unable to pay the bills. If relaxing is one of your goals upon retirement, having a no-pressure and stress-free environment ought to be among your main goals. If you have covered these issues, you are likely well on the road to retirement.
If you have any questions, please give us a call. The Idlewild Foundation would love to help.
About the Author
John Campbell has retired from a 40-year legal practice as a trial attorney in Tampa. He has served in multiple volunteer roles at Idlewild Baptist Church in Lutz, Florida, where he met Jesus. He began serving as the Executive Director of the Idlewild Foundation in 2016. He has been married to the love of his life, Mona Puckett Campbell, since 1972.