Retiring in the next two years? Consider these tips to make the transition successful

The approaching summer has me daydreaming. You, too?

If your dreams are focused on making the big leap into retirement sooner than later, here are three tips to consider as you prepare for the next act in your life.

No. 1:Numbers matter but so does how you plan to live your life.

It might seem odd that the first tip isn’t related to making sure you have enough money saved. The numbers matter but equally important is what you plan to retire to in terms of your life.

If your retirement means walking away from work and the routine of a career life, then it is vital to identify what fulfillment you got from work and how this will continue to be important in retirement.

For a lot of people, this means finding a new or updated identity as we shed the work titles and accolades of a career. Imagine you’re at a party and someone asks, “What do you do?” Now think about how you would answer this as a retired person.

Updating your identity can be liberating and overwhelming. Give yourself some time to consider what the next business card looks like before you give up the current one.

If work provides a large fulfillment of your social needs, thinking about how you will replace these needs in retirement is the key to success. Loneliness is proving to shorten our lives when it goes unchecked, so even if you aren’t very social, having a plan for social connection is important.

This might look like reconnecting with old friends, finding new friends or building a deeper community with your current friends.

One of the most disorienting experiences for a newly retired person can be the shakeup of daily routines. It sounds freeing to be able to linger over the morning coffee and paper, or enjoy a long lunch with friends while you are crammed into a schedule of meetings and emails.

While this can be rewarding, most people need to bring in an element of structure to the days and weeks in retirement to help feel balanced and fulfilled. Take out a piece of paper and sketch out what a week in retirement might look like. Focus on having activities that are pleasant, engaging or meaningful.

No. 2: Have savings outside of the 401(k)s and IRAs.

One of the biggest shocks in retirement can be taxes. You may think you are mostly done with those when you stop earning a paycheck.

If your plan is to use your retirement savings accounts to create your own paycheck, chances are most of that money has not been taxed. Before you know it, you might be paying tax rates similar to ones you paid while working.

It is not too late to focus your savings on having some money that has been taxed to balance out the pre-tax money. That could look like a high interest savings account, money market, CDs or an account where you buy investments with after tax money, often called a brokerage account.

No. 3.Track your spending today to test out your retirement plan.

It is important to monitor your spending early in retirement to make sure your spending is sustainable for your lifetime. Keep track of all your expenses before your retire. You can use this information to understand what spending will look like in retirement.

Tracking your spending before you retire serves two purposes. One, you may identify areas where you want to reduce your spending now so that you can put that money toward savings. Two, you will have open eyes to your expenses when planning your retirement.

You can then see how long your money would last with that level of expenses. If you are spending too much and need to make adjustments, it is better to do this sooner in retirement than later.

Retirement should be the golden years of your life and they can be with proper planning. Engage with a Certified Financial Planner to see if you are on track to retire well.

Jessi Chadd is a CERTIFIED FINANCIAL PLANNER professional and a member of Financial Planning Association of Greater Kansas City. She is a shareholder and chief wealth officer with Aspyre Wealth Partners in Overland Park.

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