6 Habits of a Successful Retiree

Updated on December 17, 2014

chip_h6By Chip Hollingsworth, CRP, CFEBS

Everybody want to retire successfully…..yet few people are really willing to prepare for it!  As human being’s we are creatures of habits. We’re told time and time again, good habits lead to success, while bad habit hinder progress. This philosophy holds true to the retirement process, especially leading up to it. I like to tell my clientele, “It’s never too late to start making better choices!”

By establishing the following six habits, you will hopefully be able to enjoy retirement and all the upsides it has to offer!

1. Have a Clear Vision of Where You Want to Be

Know what you want! More importantly always know where you stand financially! I always like to refer to your vision as a puzzle, you know what the big picture looks like, but make sure all of the pieces are fitting together to make it happen.

Planning and saving for retirement should begin as early as possible. Be clear on your spending and know your budget

Know what you want, what’s important and where you stand, especially with the big picture, but even with the small stuff like financial paperwork details.

Planning and saving for retirement should begin as early as possible. Being clear on spending and knowing your budget are great habits for any age, but even more in retirement. 

You can do this by Draft a balance sheet annually, and use it to gain a clear picture of your assets, debts and net worth. Periodically examine income and expenses to determine your discretionary income, then make a plan to use it for future needs.

2. Educate Your Self – Knowledge is Power

Retirement is one of our most important financial endeavors, so it’s vital to be educated. Seek advice from a trusted financial advisor, being sure to interview several to determine a great fit for your investment style and personality.

Since many retirees count on Social Security for at least some of their retirement income, work with an advisor who is well versed in the Social Security arena. It can be complicated – presently there are over 567 ways to claim Social Security benefits!

3. Minimize Debt and Taxes

It’s not what you make, but what you keep.

“The rich rule over the poor, and the borrower is slave to the lender.” Proverbs 22:7

Don’t become a slave to debt, especially in retirement. Earning power is substantially decreased in retirement, making it harder for retirees to work and earn money.

It’s a good practice to minimize income taxes in retirement. Minimizing taxes helps maximize your income for your golden years.

4. Minimize Risk

It’s a good habit to evaluate the possibility of your investments losing value or income-producing abilities. Use tools like portfolio re-balancing to minimize potential losses in value and purchasing power.

Similarly, evaluate insurance coverage at least every two years, including property, auto and life policies. Insurance markets change quickly and significant money can be saved by shopping around. Consider a personal umbrella policy to provide financial protection beyond a typical property or casualty policy. 

Lastly, keep adequate cash reserves for emergencies. For those entering retirement, it’s advisable to keep six months of expenses in reserve. For retirees, generally three months will do.

5. Protect your estate

It’s your plan or Uncle Sam’s – you decide!

Establish a Will and be sure to review it for accuracy and any needed corrections. Review your Powers of Appointments too while you’re at it and keep health care advance directives current and available.

6. Educate Others

One of the best ways to demonstrate learning is to teach others. A habit that can reap benefits for years is to mentor young people (like grandchildren) to be financially savvy – even encouraging them to save for retirement and be responsible saving machines!

A deposit of $500 at age 12 in an account that doubled every six years would be worth more than $1 million at age 78! The legacy you leave by teaching them to save is far more valuable than any assets you leave behind.

Aim at nothing and you will hit it every time! Plan today to enjoy tomorrow!

Bio: Chip Hollingsworth, founder of the Federal Employee Benefits Assistance Agency, has been successfully providing his clients with sound financial guidance for over 3o years. Chip has been a trusted advisor to Federal employees and retired/disabled veterans for over a decade managing thousands of clients across the country. For more information visit http://fedfriends.com/index.html or Call 256-467-4520.


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