Pre-retirement is the time to dream up all of the activities you see yourself partaking in once you ditch your 9-5. To determine your retirement values and vision, first, let the ideas flow and jot them down.
How do you want to fill your time — and spend your hard-earned money — once you start retirement?
By defining your values and visions for retirement, you can begin to paint a picture of what you’re saving your money for and how much you’ll need to have saved by the time you hit your target retirement age. This foundational exercise makes it easier for you to prioritize spending, prompts you to learn new ways to grow your money, and inspires you to push harder toward your retirement goals.
The brainstorming phase is a great time to pull in a trusted fiduciary financial advisor from Denver so they can start learning about your values, offer detailed insight about what to consider when retiring in Denver, and offer a customized financial assessment as you create your financial blueprint for retirement.
No matter which city you choose to retire in, there will be a unique set of local financial factors that will play a role in your overall retirement strategy. Here are five data points specific to Denver you should consider when retiring in the Mile High City.
Future retirees should assess the housing market as part of a complete retirement plan. The cost of homes, market conditions, taxes, and interest rates can help you determine if buying or selling a home will get you closer to your personal retirement goals.
Defining these specifics should encourage critical thinking.
Denver’s population and workforce dynamic have expanded over the last few years, driving the cost of living up for locals and new residents. Currently, Denver’s cost of living is higher than the overall U.S. average, and than the average city located within Colorado.
As the cost of some necessities may increase with the city’s growth, the cost of transportation is more likely to hold steady, if not decline, as the city’s walkability, biking, and public transportation scores indicate many errands can be run without a car. This silver lining means that retirees can save money on gas and ancillary auto costs despite the overall rising cost of living.
No need to go out and purchase that brand new electric vehicle just yet.
A holistic look at the cost of food, housing, transportation, personal care, and entertainment will help give a more accurate representation of how much to allocate toward basic expenses during retirement planning.
Evolving fiscal policies and tax laws can create additional layers of complexity and stress when saving and planning for retirement. Let’s analyze where Denver currently stands, and how to stay on top of changes over the years.
Colorado is one of the most tax-friendly states for retirees. Wages are taxed at normal rates, which is currently a flat rate of 4.63 percent, and the following income streams are partially taxed:
There are also large tax deductions for senior citizens in Denver. These stats are from the Colorado State website:
Comprehensive retirement planning should also take health statistics into consideration. Colorado is ranked as one of the healthiest locations in the United States, due to its exceptional leisure options and its exemplary healthcare system. Not only does Colorado have over 100 hospitals, but two are nationally ranked and nine meet standards for their strong performance.
In order to take advantage of the tremendous healthcare options, you may need to update your insurance plan post-retirement. The Connect for Health insurance marketplace offers tools like plan comparison and cost estimation to help inform customers about the costs of insurance in Colorado, and how much you might need to set aside for health costs during retirement.
For many retirees, senior resources like senior housing and health services may be a future cost to consider. Within the Denver area, the suburb Westminster has the highest rated facilities, with 4.4 stars out of 5, according to Caring.com. But, quality care can also come at a cost that should be factored into your overall retirement savings.
Research shows the average cost of a senior care facility in Colorado is higher than the national average at roughly $3,750 per month compared to $2,877 per month. Estimating the length of your retirement may help you understand how long you might need to take advantage of senior resources. Don’t forget, in Denver, a strong healthcare system and an abundance of recreation activities could translate into a longer retirement.
For a comprehensive list of senior resources, beyond assisted living, you can access this guide.
By getting to know actual facts and figures about retiring in Denver, you can estimate all predictable expenses to add to your financial blueprint and retirement plan for accurate projections. If these calculations seem daunting, it’s wise to consult with a fiduciary financial advisor in Denver to help you simplify the process.
By defining your values, and understanding the retirement obligations unique to Denver, you have created the foundation for a financial blueprint. In addition to the costs we’ve covered above, let’s add your specific data.
Remember, everyone’s personal retirement plan will be different, so when in doubt, contact a fiduciary financial advisor to create one for your unique lifestyle.
In order to achieve your financial goals, you’ll need to have enough money stashed away and the ability to allocate resources thoughtfully to keep up with your projected lifestyle. And, to know your savings options, you’ll need to know your monetary starting point.
Perform an assessment on your current accounts so you can clearly see your net worth. Then, make adjustments to create a retirement plan that fits your values and lifestyle. For example:
Discover the value of all valuable assets, such as:
Then, make adjustments, like:
By learning your current starting point, you know how much you’re currently worth, and can easily make minor adjustments that streamline your saving and investment habits making it easier to improve larger financial decisions.
How can you continue to adjust your portfolio to maximize your savings or meet your retirement goals?
Every person is different so working with a fiduciary financial advisor can help you understand specific changes that might make sense. For example, adjustments you can make to accounts like:
The best way to get where you want to be is by working with an advisor with your interests in mind. As you’re researching financial advisors, look for someone who has taken the fiduciary oath for the best direction on your investments and retirement planning strategy.
The NAPFA Fiduciary Oath states your wealth advisor will:
Lower stress in your life by learning how to effectively save money, and rest assured you’ll be prepared for retirement when you’re ready to clock out for the last time.