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Key takeaways

  • Prioritize your passions: Reflect on your interests and dreams to create a retirement bucket list aligned with your passions and values.
  • Financial planning matters: Budget wisely, assess resources and stress test your portfolio to help provide financial security in retirement.
  • Spending reflects values: Where you spend your money reflects your priorities – make choices that resonate with your most cherished goals.


Tom Feely

Executive Director, Area Product Owner

With the newfound freedom of retirement comes a profound question: What's next?

As you stand on the threshold of retirement, it's an opportune time to consider the financial and personal goals that will shape this exciting phase of your life. Retirement is an ideal canvas for crafting your unique journey. In this article, we'll guide you through the process of identifying and managing your financial goals during retirement.

Reflecting on your passions, interests, health and budget

Before delving into the world of financial planning and investment, it's essential to take a step back and reflect on what truly matters to you during your retirement years.

  • Passions and interests: Consider the activities that ignite your enthusiasm – those hobbies and interests that bring joy to your life. Reflect on what you've enjoyed doing but never had enough time for while working. Whether it's volunteering, traveling, exploring new hobbies or spending quality time with loved ones, these aspirations form the core of your retirement goals.
  • Health and abilities: As you envision your retirement, it's crucial to align your goals with your current health and physical abilities. Assess your well-being and consider any potential limitations. This self-awareness will help you set realistic and achievable goals that align with your physical capabilities.
  • Budgeting and portfolio stress testing: While dreams and aspirations are essential, they need to be financially grounded. Examine your budget and evaluate your financial resources to determine if your goals are financially feasible. Consider conducting a stress test on your investment portfolio to ensure that your cash flow can withstand the financial demands of your retirement ambitions as well as any potential downturns in the financial markets.

By integrating your passions, interests, health considerations and budgetary awareness, you'll be more equipped to shape a retirement that's both fulfilling and financially sustainable. The key is to strike a balance between your aspirations and your resources, to help ensure that your retirement years are a time of joy and financial security.

The significance of budgeting

Budgeting is the foundation of a financially stable retirement. It provides clarity on your income, expenses and how to allocate your resources effectively. Here's why it's essential:

  • Income planning: Start by assessing your sources of income in retirement. This may include pensions, Social Security benefits, savings or other investments. To create a well-structured budget, it's important that you understand the inflow of funds.
  • Expense management: Create a detailed breakdown of your expenses. Consider regular costs like housing, health care, insurance and daily living expenses. Factor in discretionary spending for activities and hobbies you plan to pursue.

A budget gives you control over your financial situation. It helps you live within your means and make necessary adjustments as circumstances change.

Assessing your financial resources and cash flow

To ensure a smooth retirement, it's crucial to have a clear understanding of your financial resources and cash flow:

  • Retirement accounts: Evaluate your retirement accounts, such as 401(k)s or IRAs. Understand your account balances, contribution limits and any required minimum distributions.
  • Pension and Social Security: If you're eligible for a pension or Social Security benefits, calculate the expected monthly payouts. Understand when and how to claim these benefits to maximize your income.
  • Emergency fund: Maintain an emergency fund to cover unexpected expenses, ensuring that you don't need to tap into your retirement savings prematurely.

Stress testing your portfolio

Preparing your investment portfolio for the uncertainties of retirement is critical:

  • Diversification: Consider your options across asset classes to mitigate market exposure risk. Diversification can help cushion the impact of market volatility.
  • Risk tolerance: Assess your market exposure risk tolerance and make investment decisions that align with your comfort level. As you approach retirement, it may be wise to shift toward a more conservative investment strategy.
  • Stress testing: Stress testing your portfolio involves simulating various financial scenarios. Consider how your investments would perform in a market downturn or if you face unexpected expenses. This practice helps you prepare for potential challenges and adjust your investment strategy accordingly.
  • Maximize yields: If you're retired, you've likely allocated a portion of your portfolio to cash and cash equivalents as a way of limiting market exposure risk and preserving your capital. One way to boost your retirement income is by ensuring that you're earning the highest possible yields on your cash investments – particularly when interest rates are elevated. This might mean exploring money market accounts, depositing cash in high-yield savings accounts or locking in higher rates for longer time frames with a certificate of deposit.

Keeping an open mind and adapting goals

While you embark on your retirement journey with a set of goals and aspirations, it's important to remember that life is ever evolving. The beauty of retirement lies in its flexibility and the opportunity it provides to explore new possibilities and adjust your goals as circumstances change.

  • Embracing new experiences: Retirement is the perfect time to explore uncharted territories and embrace experiences you never thought possible. Be open to trying new things – whether it's learning a new skill, joining a club or traveling to a place you've never been before. An open mind can lead to unexpected joys and discoveries in your retirement years.
  • Flexibility in goal-setting: Understand that your initial retirement goals may need to be adapted over time. As you age, your interests, priorities and health may evolve. Don't be afraid to modify your bucket list and financial plans to align with your current circumstances. Flexibility is key to ensuring that your retirement remains fulfilling.
  • Balancing routine and adventure: Striking a balance between routine and adventure is crucial. While spontaneity can add excitement to retirement, maintaining some structure and consistency can provide stability. Consider how you can integrate both familiar routines and exciting new endeavors into your daily life.

By keeping an open mind and being willing to adjust your goals as needed, you can make the most of your retirement years. Embrace change, stay adaptable, and remember that retirement is an ongoing journey of self-discovery and personal fulfillment.

Financial priorities and values

Where you spend your money during retirement speaks volumes about your values and priorities. It's not just about dollars and cents; it's a reflection of what truly matters to you. Let's explore the connection between your spending habits and your values, helping you align your financial choices with your most cherished goals.

Identifying your financial priorities

Your spending patterns offer valuable insights into your financial priorities:

  • Review your expenses: Take a close look at your monthly expenses. What categories consistently receive the most substantial allocations? Are these expenses aligned with your long-term goals and values?
  • Align with values: Reflect on your values and what brings you the most joy and fulfillment. Do your spending choices reflect these values? For example, if family and travel are top priorities, ensure that your budget allocates resources to support these pursuits.
  • Consider a liability driven approach: Liability driven investing (LDI) involves structuring your finances to ensure that you will have enough income to afford a specific obligation in the future. This type of strategy can be useful for retirees – whether it's planning for a specific goal like a once-in-a-lifetime vacation or aligning your assets to ensure that you will have the income you need to cover your expenses over the duration of your retirement.

Reflecting on what matters most

Your retirement spending is an opportunity to focus on what truly matters to you.

  • Quality of life: Think about the experiences and comforts that enhance your quality of life. This might include investing in hobbies, maintaining good health or ensuring a comfortable living environment.
  • Legacy and giving: For some, leaving a legacy or giving back to the community is a top priority. Allocate resources for charitable donations or set up funds to support causes that resonate with your values.

The bottom line

Your retirement is a journey of opportunities and fulfillment. Budgeting, assessing resources and aligning spending with values are key steps in securing a fulfilling retirement.

Get started today by creating a values-driven budget, reviewing spending habits and seeking professional guidance.

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