Four Phases of Retirement: Final Retirement Phase and Conclusion

The final years of retirement are the last stage. This is when you may find yourself battling the physical and mental challenges of old age. During this final phase, some retirees move out of their homes and into assisted care facilities or even nursing homes. Many times medical expenses, including prescription drugs, take up a significant share of your monthly income. You can even become restricted in your activities due to physical limitations.

Conclusion

Regardless of your age or which phase you are in or approaching, here are some important things that you need to constantly review and consider:

1)   Realize that your cash flow needs can be different for each phase of retirement. Your early phase and final phase have the potential to have the most expenses. Expenses can usually be lower in the full or pre-retirement stage.

2)   People are living longer. Better health habits, advances in medicine, and many new drugs have extended people’s lives longer than prior generations. It is imperative to monitor and review your investment choices on a regular basis to give yourself the best possibility of meeting the cash flow needs you will require throughout each phase of retirement.

3)   It is imperative to periodically rebalance your investment portfolios to reflect the various changing priorities and living patterns as you go through each of these retirement stages. You should systematically revisit how you can adjust your portfolio based upon your actual life and health changes, goals, needs, objectives, and risk tolerances.

4)   It is essential to review your needs for long-term care and other costs (like medical and burial expenses) before and during retirement.

 5)   It is crucial to constantly monitor your cash distributions from your retirement savings. We have experienced a significant decline in interest rates over the last decade and that can affect your portfolio. In this low interest rate environment it is even more essential that you have a strategy for taking distributions from your portfolio. In the past, a larger distribution rate might have been acceptable, however, with today’s low interest rates it is imperative to make sure that your withdrawal rates are reasonable and will be sustainable over the long-term.

The bottom line is that throughout each stage of retirement it is wise to make sure that you plan and monitor. Remember, the only thing that is constant is change!

Our role is to help and assist you through each stage of your retirement. We take great pride and satisfaction in reviewing each of our client’s individual situations and needs. Our goal is to fully understand and review your retirement and estate planning needs.

Please call us at (908) 379-2607 if you have any questions or need any assistance and we will be happy to help you.