Are you ready to retire today? Let us help you take the leap with everything you need to know to prepare for retirement

Retirement is a long-term financial process that we all share. It is a new chapter of our lives that may last 30 or more years – almost as long as our working years. No more commuting to work or dealing with the daily “grind” of our profession or business. For some people, retirement may be just a short time away; for others, it may take longer, but that doesn’t mean you don’t start planning for it now. 

Retirement is a singular pursuit in life when you transition from working years to the “golden” years. It also marks a pivotal shift in your financial life that involves not just major adjustments or possible significant lifestyle changes, but also requires comprehensive planning. 

As Buffalo Grove CFP® professionals, we specialize in helping individuals create sustainable retirement plans. Our newest Quick Guide, “Ready to Retire Today? Preparing for Life’s Next Chapter” shares important strategies to help you ease into retirement when the time comes. 

Chapter 1: Have the Right Mindset

Chapter 2: Setting Realistic Financial Goals

Chapter 3: Shifting from Saver to Spender

Chapter 4: Social Security Planning

Chapter 5: Don’t Forget Healthcare and Inflation

Chapter 6: Starting a New Career or Passion

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Chapter 1

Have the Right Mindset

“Am I ready to retire today?” “Does retirement mean I stop working and producing income?
Deciding whether you’re ready to retire involves more than just assessing your finances—it’s also about understanding your emotional and psychological readiness for this significant life change. The following are some key considerations to help you determine if you’re truly ready to leave the workforce:

  1. Beyond having enough savings, consider whether your retirement funds can support your desired lifestyle without additional income. This includes regular expenses, healthcare, and unexpected costs.
  2. Assess your current health status and anticipated medical needs. Good health can greatly enhance your retirement experience, allowing you to enjoy activities and manage costs more effectively.
  3. Retirement can lead to a significant change in your social interactions. Consider how you will maintain social connections without the built-in network that work often provides. This can involve hobbies, community involvement, or part-time work.
  4. Reflect on what you would like to pursue in retirement. Without the structure of a job, days can feel empty. It’s helpful to have goals, whether they’re related to travel, learning new skills, volunteering, or another long-deferred passion.
  5. Leaving a career can also mean a shift in identity and routine. Consider how you feel about these changes. Are you looking forward to more free time, or is time a source of stress? Sometimes, easing into retirement with part-time work can produce a more comfortable transition.
  6. Think about how you want to spend your days in retirement. Is it through traveling, pursuing hobbies, or spending time with family? Having a clear vision can make your retirement more fulfilling.

SGL Financial Insights: If there are doubts or concerns about your retirement readiness, consulting with a Buffalo Grove financial advisor to discuss your situation can be very beneficial. The discussion will help clarify your readiness and ensure a smooth transition into this new phase of life.

Chapter 2

Setting Realistic Financial Goals

Setting a retirement budget before stepping away from the workforce is crucial for several reasons. A pre-retirement budget allows you to anticipate and plan for expenses more accurately. However, retirement often changes your spending patterns—for example, healthcare costs may rise while job-related commuting expenses disappear. A budget helps you think through the need for changes, which helps you manage your cash flow more effectively.

Furthermore, you need a realistic understanding of your income after you retire. This includes fixed income sources like Social Security or a defined benefit pension plan (increasingly rare), potential earnings from investments, and distributions from retirement savings accounts, such as IRAs, Roth IRAs, and 401(k)s, and passive income from alternative investments, such as real estate. Once you have a conservative income appraisal, you can develop more realistic estimates of your month-to-month expenses.

SGL Financial Insights: When you create a budget before you retire, you can identify any potential gaps between your expected income and budgeted expenses. This foresight gives you time to make adjustments, like saving more before you retire, investing for higher returns, or even changing your retirement date. 

Watch Our Video: 5 Principles of a Well-Managed Portfolio

Chapter 3

Shifting from Saver to Spender

Consider how long you’ve been saving for retirement by diligently contributing to various savings accounts. Once retired, you’ll start doing the opposite when you use the assets to produce income for your retirement years. This can be a major psychological transition for millions of Americans each year.

You will all likely be shifting from being a saver to a spender. This is especially complex as people are living longer retirements that could last 30 years or more. Your hard-earned savings will need to fund your lifestyle for that long. 

Here are ways you can ease into this new financial lifestyle:

  1. Recognize that spending your savings is what they were intended for. You’ve saved diligently to fund your retirement, so allow yourself to use this money for living expenses and enjoying your post-work years.
  2. Make prudent assumptions about your retirement income and expenses. Creating a budget helps you see how much you can spend monthly without invading your principal. This approach keeps your spending in check and reduces your anxiety about running out of money.
  3. Be aware that some costs, like healthcare, will increase at a rate greater than inflation while others, such as work-related expenses, will decrease. You need to make adjustments over time to minimize your risk of living beyond your means.
  4. As lifespans increase, planning for a longer retirement is crucial. Consider how you will manage your assets later in life for both spouses. A long life can be a blessing or a curse, depending on your financial wellness.
  5. Remember, retirement is also about enjoying the fruits of your labor. Spending on travel, hobbies, or gifts for grandchildren is okay, assuming these expenses are planned for and within your budget.

SGL Financial Insights: Planning and monitoring your financial health is the key to a successful transition from saving to spending in retirement. By establishing a realistic budget and understanding the need to use your savings in a disciplined manner, you can spend confidently, knowing you’re still in control of your financial security.

Watch our Co-Founder, Steve Lewit, discuss love and money on WG9 News.

Chapter 4

Social Security Planning

Many people we speak with assume that when they turn 65, they should start taking their Social Security benefits. But that is a retirement myth. Determining the optimal time to begin taking Social Security benefits takes careful consideration and will vary based on your unique situation and goals. 

You can begin taking your benefits as early as 62, but doing so may reduce your full benefit by as much as 30%. Furthermore, each year you delay, up until age 70, increases your benefits by 8%. If you’re in good health and have a family history of longevity, delaying benefits could lead to a larger total payout during your retirement years. 

If you’re married, the timing of when you and your spouse claim benefits can also impact your decisions for both parties. 

If you plan to continue working while receiving Social Security, be aware that if you are under the full retirement age of 67, part of your benefits may be withheld if you earn over a certain amount. Understanding these limits is important to avoid surprises in your net income.

You should also time your Social Security benefits so they coordinate with your other retirement assets. For example, suppose you have additional income sources like a pension, IRAs, or a 401(k). In that case, you may take Social Security earlier to allow these assets to grow tax-deferred, thereby increasing your financial stability in your later years.

Social Security benefits may be taxable depending on your overall income in retirement. Planning when to take benefits can help manage your annual tax liabilities.

SGL Financial Insights: Starting your Social Security benefits at the right time can significantly affect the total amount you receive over your lifetime. 

Chapter 5

Don’t Forget Healthcare and Inflation

When planning for retirement, it’s critical to consider rising healthcare costs and the erosive impact of inflation. 

Healthcare expenses tend to increase as we age, often outpacing other costs. Planning for these expenses ensures you can afford quality care without compromising other retirement goals. Examples of these costs can include: Assisted Living, Skilled Nursing, and Memory Care, not to mention the potential for various debilitating, long-term illnesses.

Similarly, inflation erodes purchasing power over time, meaning today’s dollars will buy less and less in the future. However, excess inflation over longer periods can have a detrimental impact on retirement lifestyles. Regularly updating your retirement plan to reflect current inflation rates and healthcare cost trends can keep your savings on track. 

SGL Financial Insights: It’s wise to work with a financial advisor who can help tailor your investments to account for these factors, ensuring a stable financial future as you age. We created a proprietary four-pillar retirement planning process for income, investments, taxes, and legacy planning. 

Chapter 6

Starting a New Career or Passion

Many retirees choose to continue working in some capacity during early post-retirement years. This may be starting a new career, consulting to share knowledge, or doing part-time work.

Staying active through work can positively affect your physical and mental health. It provides a reason to stay engaged, particularly if you need to feel productive. If you like having a routine, this may also help. It can also be incredibly rewarding, especially if you do something you’ve always wanted, but the timing or the income wasn’t right. 

The social interactions that come with a job also help keep loneliness at bay, which is a common concern for many retirees.

The income from a new job can also help you offset living costs so you don’t have to rely as heavily on your retirement funds. You can also use new-found income to fund your passions, like extended travel or new interests. 

SGL Financial Insights: You may find satisfaction in turning a lifelong passion into a new career, whether it’s teaching, consulting, writing, or starting a new business. Working after retirement is not just about staying busy—it’s about contributing, growing, and enjoying life with financial stability and a sense of purpose.

If you’re ready to learn more about our four-pillar retirement planning process, we invite you to start a conversation with us


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