Defining your ideal retirement goals
Preparing for retirement is more than just saving. This next chapter could span 20 to 30 years of your life, and to make the most of it, it's important to take time to define what you want out of it – both financially and nonfinancially. Here are five key questions to ask yourself to help you define, and achieve, your ideal retirement.
1. When do you want to retire?
As you consider your desired retirement age, remember — the earlier you retire, the more you’ll need to save, and you’ll have less time to do it. Depending on your retirement age, you may also need to develop strategies to meet your retirement income and health care needs until you're eligible for key benefits like Social Security, Medicare and penalty-free withdrawals from your retirement accounts.
Here are some important financial milestones to keep in mind:
| Age | Milestone |
| 59½ | Eligible for penalty-free withdrawals from retirement accounts without exception |
| 62 | Eligible for Social Security benefit at reduced benefit amount |
| 65 | Eligible for Medicare |
| 66–67 | Eligible for full Social Security benefit if not claimed earlier; exact age depends on birth year |
| 70 | Eligible for maximum Social Security benefit if not claimed earlier |
2. How do you want to spend your time?
Once in retirement, you’ll likely have more free time available than you’ve had in decades. For some, that may feel liberating, but many new retirees struggle to find a sense of purpose in their daily lives. To get a better sense of how your time might be spent, consider outlining your schedule for your first week, first month and even your first year in retirement.
Are there large gaps of time in your schedule? If so, how might you fill it in ways that give you meaning and a sense of purpose? While everyone’s ideal retirement is different, common things to do after retirement include:
- Spending quality time with family and friends
- Working
- Volunteering
- Traveling
- Taking steps to improve health/fitness
- Pursuing hobbies and interests
- Learning new skills
Identifying fulfilling ways to spend your time can better prepare you for your transition and help reduce the feelings of disorientation and uncertainty common with new retirees. You may even want to test-drive some of your anticipated activities to see if they suit you.
It’s also important to think about the things you want to stop doing in retirement. If you want to pay someone else to do them, you’ll need to factor those costs into your retirement budget. Additionally, how you spend your time is likely to change as you age, so be sure to account for those changes when setting retirement goals.
3. Where do you want to live?
Deciding where you want to live is another big question to answer before you retire. Do you plan to stay in your current home or move? Are you moving in-state or to a different state or country altogether? When deciding where to retire, you’ll want to consider factors like:
- Proximity to friends and family
- Safety
- Access to quality health care
- How you want to spend your time and whether the location supports it
- Affordability
- Climate
And you'll want to think about whether it’s a home and location you can see yourself aging in as your needs are likely to change over time.
Whether you move or retire locally, you may want to consider downsizing your home. A smaller home can reduce your utility bills, maintenance costs and property taxes, and you may even net a gain on the transaction. It also means less time spent cleaning and caring for your home, which is another consideration, especially as you get older.
4. What kind of financial lifestyle do you want to have?
Think about the things you need and want in retirement: How much will you splurge on each? Will it be more or less than what you spend today? Are there any major purchases you would like to make? The more you want to spend in retirement, the more you’ll need to save, so we’ll want to be sure to incorporate your lifestyle goals into your strategy.
5. Do you want to give to others?
Many Americans want to give to others during their lifetime and/or after they pass. If giving is important to you, you’ll need to define your giving goals so they’re incorporated into your strategy. As you consider your giving goals, think about the:
- Recipients: Do you want to give to your family, church, community, charity?
- Timing: Do you want to give assets during your lifetime or leave an inheritance?
- Type of gift: Do you want to give financial assets or nonfinancial assets?
- Amount: How much do you want to give to each recipient?
If giving is important to you, you could also consider donating your time. Volunteering at a nonprofit or babysitting your grandkids can give you a sense of purpose and benefit your recipient financially without risking your retirement.
Get help as you think about your retirement goals
Don’t sweat it if you don’t know the answers to all these questions right now. Think of this as a helpful self-reflection exercise to do as you get closer to retirement. And even though there’s a lot to think about, your Edward Jones financial advisor can help you better prepare for the financial impact of not working full-time — whenever that may be — and plan for the retirement you deserve.