Retirement may be one of the most anticipated events of our lives. As you get closer to this transition into your next phase, you may have a heightened awareness of the amount of savings you’ve accumulated backed by a persistent question of whether or not it will be enough.
Retirees leaving a paycheck behind can’t help but zero in on the money it takes to live a “successful” retirement. In fact, most retirements fail because of non-financial reasons. The key to a fulfilling and happy retirement is to accumulate four different types of wealth to fund your retirement experience. Where do you need to make more investments?
4 Types of Retirement Wealth
1. Financial wealth
The valuable financial assets you have, such as your retirement savings plan or your home, are what we usually think about when it comes to wealth and retirement. While retirement is about so much more than the money you’ve saved, you cannot overlook the importance of protecting and managing your financial wealth so you have the resources to fulfill your needs throughout retirement. If you’re not already working with a fiduciary financial advisor to guide you through your retirement plan, make sure you understand these key elements to help secure your financial wealth:
- Follow an investment process to eliminate second guessing and reduce stress as markets move around and inflation shifts. This includes rebalancing your portfolio to manage risk and stay on track.
- Make the right choice for your family when it comes to social security so you get the income you need when you need it.
- Understand the tax triangle so you can save more on taxes and know which account to draw from at what time.
- Decide when or if it makes sense to downsize your home and what to do with the proceeds when you do.
2. Social wealth
Your web of family, friends, and social relationships make up your social wealth. Maintaining, building, and expanding friendships is essential to a happy, successful retirement. Given the ebbs, flows, and transitions of life, we all need to rebuild social wealth at some time or another. Retirement is no exception.
As you start thinking about how to change, expand, and build relationships in your retirement, consider the concept of relationship circles. Each relationship you have, whether close or transactional, serves an important role in your fulfillment. And while it may feel a bit scary to cultivate new relationships, you can find camaraderie with other retirees who are seeking to make new friends, too.
Of course, you do not want to overlook those who are closest to you. If you’re a couple in retirement, make sure you and your partner are on the same page, so you can continue to support each other.
3. Time wealth
When you’ve dreamed about retirement, you’ve probably conjured imagers of doing whatever you want, whenever you want. This freedom to design your own schedule can be described as time wealth. While this type of wealth can be the most fun, it can quickly turn to boredom or worse when you don’t have a plan to fill your free time. Here are a few activities to consider:
Want more ideas? Consider these 45 fun things to do in retirement.
4. Physical wealth
It almost goes without saying that good health---your physical wealth---is the basis for a productive and successful retirement. Whether or not you’ve focused on physical wealth in the past, retirement is the perfect time to adopt new habits to build this important asset. And while there is a significant financial aspect of healthcare in retirement to make sure you have adequate insurance coverage, exercise, nutrition and mental health practices can all boost your retirement satisfaction.
While you can avoid a sedentary lifestyle and get outside to move your body and clear your mind, You can accumulate more physical wealth and social wealth at the same time when you partner up or join a group. Find others to join you for outings such as hiking, biking, or visiting the local farmers’ markets.
Each one of these wealth accounts serves to help you prepare for and thrive in retirement. Contribute to each now as best you can to help smooth the transition into retirement. Do you wonder how prepared are you to retire? Take our 3-minute retirement readiness quiz.