2. Let your finances inform your lifestyle changes
Once you make the switch to retirement, you might also need to adjust the way you think about your money. In your working years, you save for retirement and focus on accumulating assets. In retirement, you take actions that help give you a reliable, sustainable cash flow and keep your spending and expenses in line with that cash flow.
It’s crucial to develop a clear picture of your income potential before entering retirement. That income potential will drive the decisions you make about working and spending during retirement. “The answers will help you determine whether your retirement vacations are to Paris, France, or Paris, Texas,” says Larson.
3. Prepare for the psychological shift
Larson often asks this question of clients who are considering retirement: “It’s Tuesday at 9:45 in the morning, and you’re retired. What are you doing?”
The question is designed to spur thought. How will you restructure your life when your day is potentially filled with free time?
To help clients get ready for the shift, Larson often suggests that they consider easing into changes slowly—perhaps working reduced hours for the years leading to retirement or using vacation days to try out a retirement lifestyle. For some, this transition phase leads to new expectations around retirement—and new goals for their life in retirement.
Larson tells his clients that planning for retirement “isn’t complicated but it is complex” due to the many inter-related components. For a fulfilling retirement, start planning those details early and carry out your plan deliberately.