Are you planning an active post-work life in retirement? How much do you need?

Key questions to consider for financial freedom by age 65, but also, to achieve your retirement lifestyle and gifting goals.

As you approach retirement, one of the biggest concerns on your mind might be whether you have enough savings to enjoy those golden years fully. The dream of quitting work by age 65 is a goal of many, but planning for both living costs, as well as lifestyle goals and gifting or leaving an inheritance, is really important to make sure you can not only afford to live, but live the way you want.

Having worked with many couples over the last 15 years, I’ve found that planning needs to include not only annual living costs, but also travel and lifestyle factors in the early post-work years, and gifting and family support in the latter retired years, or after death.

Here are some critical questions to consider which can help guide your savings and investment strategies now, to help ensure your life post work is as fulfilling as you dream...

1. Do You Plan to Travel in Your Early Retirement Years?

Travel is often at the top of many retirees' wish lists. Exploring new places can be thrilling, but it also comes with costs. Consider how much you plan to spend on travel in your first few years of retirement. Will you want to take long trips, explore international destinations, or engage in leisurely weekend getaways? Setting a travel budget will not only enhance your retirement experience but also give you a clearer idea of how much you’ll need to save.

2. Do You Plan to Work Full-Time Until You Retire?

Your work timeline can significantly influence your retirement savings. If you’re planning to continue working full-time until you reach 65, you may have more time to save and invest. However, if you intend to reduce your hours or transition into part-time work before retiring, you’ll need to factor in the potential loss of income and adjust your savings strategy accordingly.

3. Will Your Retirement Funds Cover One or Two People?

Are you planning to retire solo, or will you be sharing retirement with a partner? If you’re in a dual-income household, you’ll need to think about whether your retirement funds will support one or two lifestyles. Joint retirement planning can often lead to greater financial stability, but it’s crucial to assess how your combined savings and investments will meet both of your needs.

4. Do You Plan to Help Your Children Financially?

Many retirees find themselves in a position where they want to assist their children financially, whether it’s through college tuition, a down payment on a house, or simply providing a safety net. This support can be a significant financial commitment, so it’s essential to consider how this will impact your retirement savings. Think about how much you’re willing to allocate to your children’s needs and how that aligns with your overall retirement goals.

5. Will You Maintain or Adjust Your Current Lifestyle?

Your retirement lifestyle will have a profound effect on your financial planning. Are you planning to maintain your current lifestyle, or do you foresee making significant adjustments? If you want to downsize, travel more, or enjoy luxurious experiences, you’ll need a robust savings plan. Conversely, if you’re willing to live more frugally, your financial requirements may change dramatically.

6. Do You Plan to Stop Working Before Age 65?

If your goal is to retire earlier than 65, it’s vital to reassess your financial situation. Early retirement often requires more substantial savings and a different investment strategy. How long do you plan to be in retirement? What will your income sources look like? These factors will play a crucial role in determining how much you need to save and invest now.

Adjusting Your Goals

If you’re unsure about your answers to any of these questions, or if your circumstances have changed, it’s important to revisit your financial goals. Regularly reassessing your retirement plan ensures you stay on track and can make informed decisions about saving, investing, and spending. Remember, your retirement plan isn’t set in stone; it should be flexible enough to adapt to your changing life circumstances.

Planning for retirement can be daunting, but by asking these key questions, you can take proactive steps toward achieving financial independence. Whether you aim to retire by 65, travel the world, or help your children financially, understanding your needs and desires will empower you to make smarter decisions about your savings and investments. Remember, it’s never too late—or too early—to start planning for the future you envision.