Retirement Planning: Have You Created Your Career ‘Exit Strategy’ Yet?
How to Create a Smooth Transition into Life After Work
If you’re like most people, you have spent much time during your working years dreaming of the day when you can finally retire and not be bound to the day-to-day demands of your career. You’ve probably developed a financial plan to help you remain financially secure in your golden years, but have you considered what your transition out of work will look like? By developing a career exit strategy, you can transition to this hard-earned milestone smoothly and live the life you’ve envisioned in retirement. By starting the planning process early, you give yourself the opportunity to establish a financially successful retirement that’s fulfilling, too. Below, we’re sharing key career exit strategies to help you transition into retirement feeling knowledgeable and prepared.
Career Exit Strategy 1: Evaluate Your Financial Standing
First on the list is to evaluate your financial standing. It’s best to do this before setting a date for your retirement. Take into consideration your tangible assets (home, art, jewelry, and the like), investments, retirement plans, savings, and any outstanding debts and liabilities. You may want to consider talking to a financial advisor to help guide you about how best to manage your finances during your retirement. These professionals can help you put together the pieces of your financial puzzle, helping you to identify where you stand regarding meeting your goals. A thorough assessment of this kind can help you set a timeline for your career exit strategy and lay the plan to help you make sound decisions about your lifestyle and potential expenses in your retirement.
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Career Exit Strategy 2: Determine What You Want in Retirement
Everyone has unique goals for retirement. Defining those goals can be an important step in ensuring that your retirement is fulfilling. It can be a difficult transition for some, but with intentional reflection and planning of your career exit strategy, you can shape this next phase of your life to meet those goals. No matter what you dream of, whether it be travel, a new hobby, spending time with family, or volunteer work, making a plan will help set the foundation to achieve what you desire. Aligning your financial resources to support your goals is key to the retirement that you’ve envisioned.
Career Exit Strategy 3: Budget for Your Retirement
Having a budget is important throughout most stages of life, but without the income from a career, it can be especially important during retirement. Ensuring your financial stability during your retirement years will undoubtedly provide more fulfillment and enjoyment during these years. Analyze your anticipated income streams including such things as pensions, Social Security benefits, and investment returns. In turn, consider your anticipated expenses such as healthcare costs, living expenses, travel, and other expense plans or commitments. By doing so, you can create a budget that supports the retirement lifestyle you want to live. Review and make any necessary adjustments to your budget as life circumstances and goals change.
Career Exit Strategy 4: Make Your Savings Work for You
Start contributing to any retirement savings accounts you have as early as possible. These can include 401(k)s, IRAs, and pension plans. If your employer has a matching program, take advantage of growing that account without any additional out-of-pocket investment from you. Seeking some professional advice can be helpful to make sure that your investments are in alignment with your goals, and your risk tolerance. It’s smart to review your portfolio regularly so that you can make any adjustments to keep on track. Remember that these savings are the result of your hard work, and putting in the work to maximize them can provide you with financial security for your retirement years.
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Career Exit Strategy 5: Research Your Healthcare Options
Healthcare is an essential element of retirement planning. It’s important to understand the Medicare and supplementary health insurance plans that are available, so research the coverage options and costs. Expenses for retirees often differ from the allowable expenses for those who are working and have employer-sponsored healthcare coverage. Long-term care insurance may also be something to consider as it may help to protect your assets in the event of a lengthy illness or the need for a long-term care facility.
Career Exit Strategy 6: Set a Timeline
It’s important to be ready for retirement, and a smart career exit strategy includes a timeline. Because it is a time of transition, setting clear milestones and deadlines will help you approach this significant point in life with more confidence. There are several things to consider here including your age, financial preparedness, and your emotional readiness to enter this new chapter. Setting a timeline and making sure your finances are aligned with it will help you as you work towards your retirement objectives.
Career Exit Strategy 7: Plan for Your Retirement Life
Your retirement life is up to you. It doesn’t have to mean that you’ll never work again – in fact, many retirees go on to pursue the type of work they only dreamed of during their career days. Whether it be a part-time job or volunteering for a favorite charity, many organizations are happy to have the wisdom and skills that someone with years of experience may bring. Think about your skills and interests and how you might want to apply them. Having a plan for this chapter of life can provide a sense of purpose and fulfillment. Take advantage of the opportunity to pursue an unfulfilled passion or to contribute to your community. Retirement can offer a phase of tremendous personal growth.
Career Exit Strategy 8: The Benefit of Professional Guidance
Retirement planning can be complex, and some professional guidance may help if you’re feeling overwhelmed. A trusted financial advisor with expertise in retirement planning can provide advice that is personalized to your own goals and circumstances. They can help you create a comprehensive career exit strategy that includes investment decisions and getting the most from your financial resources. It may also be a smart idea to consult with a tax professional and estate planner to ensure that your retirement plan covers all the bases.
Create the Right Career Exit Strategy for You
Creating a career exit strategy for your transition into retirement is an important part of planning for your future. Retirement is a whole new phase of life that offers many of the opportunities that you may have been unable to experience during your working life. The new experiences, pursuits of your passions, and perhaps some hard-earned leisure are within reach, especially with a good plan that starts early.
At Andersen Wealth Management we are ready to help you navigate your pathway to retirement. Our team of experienced financial advisors are dedicated to helping you realize your retirement goals by providing personalized guidance and tailored solutions. Reach out to us today to learn more!