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Transitioning from working and saving to retirement and spending can be stressful process for some clients. Hopefully, with a good financial plan and sound investment strategy, you’ll have the peace of mind to fully enjoy your retirement. Now is the time to do all those things that you wanted to do but simply didn’t have the time. Your mindset now should be how your financial decisions can help you enjoy retirement.

Here are three things to focus on:


To fully enjoy retirement, staying as healthy as possible is at the top of the list. Whatever level of health you have, make a commitment to maintain and hopefully improve it. Health care continues to be one of the largest expenses in retirement. According to Fidelity Investments, it is estimated that the average couple will need $285,000 in today's dollars for medical expenses in retirement, excluding long-term care. Your retirement budget needs to include a realistic estimate of future health care costs.  


Monitoring your spending could be the single biggest factor in making sure that you never outlive your money. It’s especially important during the first years of retirement. You’ll need to be mindful of withdrawals from investments to meet cash flow needs. Depending on your age, a safe withdrawal rate from investments is usually 4-6% per year.

To help offset additional spending in the early years of retirement, consider a part-time job. Even if you don’t need the extra income, holding a part-time job may be an excellent way to stay active and socially involved.


Investing as a retiree can be stressful. Fixed income investment risk is lower and so are long-term returns. Stock market investment risk is higher and so are long-term returns. The question is how do improve your returns while keeping your risk at a comfortable level?

Consider a simple “two-bucket” approach for retirement income investing. Your portfolio is split into two components: a cash reserve and long-term investments. The cash reserve funds the next five years of cash needs and complements any social security or pension income. The long-term investments are high quality dividend stocks. Five years is chosen because it is roughly the length of an economic cycle. A “two-bucket” approach helps encourage a patient, longer term approach for your retirement income. Periodically the cash flow reserve is replenished, depending on how the long-term investments perform.