Key Habits for Successful Retirees Video from Savant Wealth Management

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Presentation on key habits for successful retirees. Thank you for joining us. My name is Chris Carlson. I am a financial adviser here in Savant’s Plymouth, Michigan office. And joining me today is a fellow financial adviser, Haley Hernandez. Welcome, Haley. Thanks, Chris. I am so glad to be here today. Super excited to discuss some tips and strategies that can help some of these individuals kind of navigate retirement, whether it be down the road or kind of already retired. Regardless, we’ve got some really good insights today.

So, very excited. Great, so I’m going to share our agenda. And so, the topics we’re going to talk about today are creating a vision for you and your partner, prioritizing your health, managing your finances, giving back, adapting to change, and finding your passion. And then at the very end, we are going to review a couple of common questions that we get about these topics that may be helpful as well. All right, so first creating a vision for you and your partners. So, Haley, would you like to walk us through this? Absolutely. Thank you so much, Chris. So, I think as advisers, oftentimes we’re asked about some of the key building blocks when it comes to building a successful retirement and what success looks like in retirement. The truth is it’s not always about the numbers and account balances that has to do with success. It’s really about what truly matters to you.

A fulfilling retirement is really one where you and your spouse are not only financially prepared and ready for any challenges or expenses that could come up, but also emotionally and practically aligned on what you want life to look like in this next chapter. So, if we take a look at this slide here, we’ll see that recent research here shows that while many couples kind of enter this planning process for retirement with broad ideas about what they’d like to do, their individual goals may not always align. So, they may have different individual goals.  men and women in particular tend to emphasize different priorities when it comes to things like lifestyle, security, and even legacy within retirement. Now, those differences don’t necessarily mean that there’s a conflict. It’s really just highlighting how important it really is to have those open and ongoing conversations with your spouse so that you’re really aware of what the individual goals are and what each person really does value.

So, we’ll explore this a little bit more in today’s present presentation, but one of the most valuable things that you can do to really prepare yourselves as a couple for retirement is to lay out those goals, clearly define and align those goals pretty early on in your planning process. Doing this ahead of time can prevent a huge headache later on when you’re ready to meet with an adviser and kind of take the next step., and it’ll also really ensure that both you and your spouse feel confident and are ready to kind of achieve what you’ve worked so hard to build. So, Chris, we can go to the next slide here. So, we’ve talked a little bit about what it means to really align on goals. Let’s take that kind of a step further now. So, this slide here is going to highlight some different key areas that we oftentimes see couples having different perspectives on when it comes to retirement. So, things like travel, location that you might end up in within your retirement, legacy, health and wellness.

These are some of the topics that not always individuals will align on. They may sound simple, but really each of these has a different meaning to every person, right? So, one spouse may view retirement as a simple, you know, staying in the same home, maybe being with family locally and the other spouse may be interested in travel or maybe even moving abroad for retirement. So, , really the biggest thing here is to not necessarily aim to have identical goals between two spouses, but again, it’s really to have those open conversations early on that can help you better understand your partner’s priorities and really what needs to happen in order for both of you to find that success within retirement.

All right; our next section is to prioritize your health. So according to the NIH there are some guidelines on what individuals should be getting for exercise you know within a week. So about 150 minutes of moderate intensity aerobic exercise which could be like walking and jogging maybe biking and then additionally muscle training exercises two times a week. So, lifting weights and things like that. Now to start doing that though can seem daunting. So, what can we do to ease into it and to create a successful scenario so that we, you know, don’t give up on some of these things and not only that but there’s other sort of non-weightlifting activities that are also important for our health. So, number one is just to start with what you already know and are doing. So, for example drinking more water trying to eat less unprocessed foods eating organic foods if possible.  you know we all know that these are healthy things that we should do that but what can really boost the amount of times that we get those in say throughout a week is a what I think is an undervalued strategy which is to log your results

I think it’s been  pretty well documented that if you are keeping a journal of for example I’m going to keep a journal of all the glasses of water that I drink in a day and if you do that throughout time, you are just naturally going to realize what you’re actually doing, you know, realistically every day. But then it’ll also just be on your brain too, oh, I need to drink more water. So, just logging your results is an important step to getting you to doing these things more often because that’s really what we’re trying to do. We’re trying to go from, maybe our certain level that we’re at now, to doing more of the things that keep us healthy. And of course, we should always check in with your doctor. If you’re going to make a plan that is going to be  different or out of the ordinary from what you normally do  when it comes to health and exercise and things like that,  please make sure that you’re checking in with your doctor to see that it is, you know, part of your health plan and going to be okay for you. And so, one big concern for our retirees is that there are health care costs that are going to rise in the future. And if you are a healthy individual, we have a recent study here from 2024 that shows that you can expect to a 65-year-old could expect to spend upwards of $395,000 on health care costs in retirement. Now, again, that’s a healthy individual.

So, if there are health concerns or other items like that, those expenses could go up even more. And, you know, that could be a significant part of your nest egg that would need to be spent on health care costs and that is a concern for many retirees. And so, here’s just an example of what those costs may be.  So, what we’re looking at here is different health insurance providers.  I guess it’s an example of different health insurance. So, one difficulty that retirees can have is if you are going to retire prior to Medicare age, so prior to age 65, there could potentially be a gap in health care coverage that you would have to cover 100% on your own if you don’t have an employer healthcare plan.  And so, one of the more common things that we see is COBRA is a is a program that is that would help you get that would help you cover the period between early retirement and so in Medicare. However, it is just a short-term solution. It’s generally not for many, many years.  It is just sort of a to fill the gap between those that issue. So, if you look down on the chart, what we can see is additional lines of if you were age 50, what would be your monthly cost to go to the private healthcare market? And then if you were aged 60, what would be your monthly cost. And they’re not insignificant, right? You’ve got to make sure that you can cover these costs in retirement. And get yourself sort of to that that Medicare age, which then gives you a little bit of relief.

Now this side here is generally not the most fun topic, but it is critically important. So, planning for a potential future in capacity. So really what this means is if you are unable to make decisions for yourself who do you appoint to help you do that? So, this is what we would more commonly hear as a durable power of attorney or a health power of attorney. And really what this is giving the authority to some other individual to make decisions in your best interest if you are unable to do so. So, if you find yourself in the hospital, you know, not conscious, can’t make decisions, can’t decide for yourself, you have somebody set up to do that for you. Now, why this is so critical is because if you don’t have this set up ahead of time and you’re incapacitated and there’s no one appointed, so then what has to be done then is the court will then appoint a guardian or a conservator who then can make these decisions for you or has the authority to. And unfortunately, sometimes that might not be the individual that you had in mind prior to your incapacitation. So, it’s important to set those up ahead of time to make sure that the individual that you want to make these decisions for you is able to do so legally in each of these individual areas. So, what we see here is a power of attorney for property. Now, this may not necessarily be the same person as the power of attorney for your health, you know, for your health outcomes. It certainly could be, but it certainly doesn’t have to be. Just something to talk with your loved ones about this. So, you’re set up in a way that would with the intentions that you want.

All right. So next we have managing your finances. So, Haley, if you’d like to talk about this. Yeah, most definitely. So, we’ve covered some really good health care planning topics. We talked a little bit about estate planning.  So, let’s turn to managing finances. And really what most people want from managing finances is confidence, right? So, confidence that they maybe have enough money saved for retirement, confidence that they can pay comfortably for health care expenses when those arise, and then confidence that they are indeed making enough to live the life they’ve always wanted. So, when we talk about recent a recent survey that Fidelity did, the top three financial concerns for people entering retirement they’re very clear.

They’re listed here as I just mentioned and it’s really individuals that are concerned that their retirement is not going to be enough or be exactly what they expected maybe due to lack of planning or other factors. But really you can see here that confidence and having financial security within your plan, it does you know typically lack when people are looking to start the conversation about retirement. So, this slide really isn’t just about the numbers themselves. It’s more so about making sure that your plan gives you that peace of mind. When your finances are truly organized and your plan is pretty solid, you can move into a transition into retirement knowing that you’re prepared for not only the expenses and events that may come up that are planned, but also the unplanned, the unexpected expenses. , you know, health problems as you continue to age. And that is really what the true financial confidence looks like within retirement. So, if we go to the next slide here, Chris.

So, this slide really gets into what we call holistic financial planning. So, retirement really isn’t just about how much can you save for retirement, how much do you need to invest. It’s about much more than that. And that is really well encompassed within holistic financial planning. It’s about looking at everything you’ve got going on in your financial picture to make sure that everything, every piece of your situation is well connected and coordinated with everything else that you’ve got going on to really help you work best to achieve those goals. So, as you can see here on this slide, this really does start with building a good team of trusted professionals who can bring you expertise in the different areas. So, we’ve got investment planning, tax planning and strategy, estate planning kind of as Chris mentioned, and then insurance. So, from there, once you’ve got that trusted team of CPAs, tax planning you know, specialists, estate planning attorneys, once you have that team, then you can move into a space where you can start to review those long-term projections. you review this with an advisor  to kind of help give you that structure and confidence that your plan is on track and that you have flexibility to kind of make adjustments as needed because we all know that you cannot create one plan at the beginning of retirement and expect it to kind of be the same throughout. Things are going to come up.

Adjustments will need to be made and that’s really the beauty of working with an adviser, so you you’ve got your spending within retirement. At the same time, you’re going to layer in different strategies for things like taxes, health care, long-term care is a big concern for a lot of individuals as you start to age. And then, of course, estate planning. So, making sure that your legacy assets are they’re set up in a way to protect that they will go to the intended recipients upon passing. All of these things they work together really nicely and that is why it’s so important to have a holistic or comprehensive financial plan.  really helps you coordinate all these different aspects of your finances and then that’s how you know really build a plan that protects your money but also supports your lifestyle, peace of mind, etc.

All right. So, giving back. This is one of my favorite topics. So, I think that the discussion of retirees in this particular area has changed over time.  Generally, what we think is you know I built up my assets, I support myself in retirement and then if there’s something left over that’s great. You know my family can have it afterwards, and that was very common, but the discussion now has really turned to the retirees wanting to give their money to their beneficiaries and to their family while they’re alive. And I think the main reason that they want to do this is they want to see the enjoyment of what they’ve worked so hard for, right? they if you leave your money after you pass, you know, you’re generally not going to  you know, have those experiences that your family can have with those funds and say go on those vacations or to help them, you know, get into a new home or whatever those, you know, family goals may be. Now, there’s a pros and cons to all of this, especially from a tax perspective.

So, depending on how you’re gifting funds and whether you are doing it through retirement accounts or through brokerage taxable accounts or through property and whether you’re doing it while you’re alive or after you pass, they all can have different tax impacts that are going to be pretty individualized to your situation.  and so those are the types of items that we would want to work through and help individuals figure out to make sure that we are trying to reduce that tax burden as much as possible while also providing the plan for the families to do what they want with their assets. Now we can see here some different let’s say tools to actually make some donations. So, if you are charitably minded as a retiree, not just giving dollars to say your immediate family, but you have some larger goals in mind with your estate, there are different ways to set that up. Again, there’s tax considerations to be discussed. So, you know, one of these vehicles may be more relevant than others for your individual situation. So, one of the most common is what we see here as the donor advised fund. And this is really a fund that you make a donation into.

You get the tax benefit of making that donation in the in the year that you make the donation. But the money is then held in this fund that is controlled by you. It can be invested so it can grow over time and then you can actually give out of that fund over many years. So, you can receive the tax benefit upfront and then give over time to your preferred charities and recipients. Now if you have a little bit more say substantial estate a private family foundation may be the route to go.  there is going to be some more complexity but with that complexity becomes more control and really you can dive into what are your goals as a family. Who do you want to support? How do you want to support it?

And you can work through those details and execute in a way that is much more detailed. And then at the bottom what we have are charitable giving annuities and a charitable remainder trust. So these are tools that you can donate to the causes that you support, donate to the charities, but also while you’re alive you can receive income from those investments to support yourself. And then once you pass, you know, those assets then are controlled by the recipient. So, these are just different examples of different tools that are out there.  all are different, all serve different purposes, all have different tax consequences.  but these are some of the items that can really make the giving that you do impactful for your goals as a family, as individuals.  And to work on your tax impact as well. All right, adapting to change.

All right, so let’s talk a little bit about adapting to change. And I think we can all agree that working your entire life and then transitioning into retirement is definitely a big change that causes for adapting, right? So, whether it’s a new daily routine that you’re implementing in retirement, or you know managing finances, navigating health concerns, adapting to change is one of the key pillars to making sure that you are enjoying your time in retirement and that your goals are on their way to being achieved. So, one of the most important factors in how we handle these changes is our mindset.  research shows that highly optimistic people are not only happier, but they’re also they also have better health outcomes. So, they actually tend to suffer less from heart attacks, cardiovascular issues, and actually have a lower mortality rate than their pessimistic counterparts. So, the more optimism that you have, it is physically better for your health to be more positive.  you know, have a better outlook on life. And you know as you think about retirement it’s not just about planning for your finances like we are saying or your lifestyle, it’s about really cultivating a mindset that helps you adapt to change as necessary within retirement and fully enjoy this chapter that you have worked so hard to cultivate. Go to the next slide. Okay. So right here right.

So, cultivating optimism. How do we actually do this?  It’s easier than you might think. So, think of things like gratitude journals, donating to charities, or just, you know, providing a random compliment to somebody. That can really do wonders for your mindset and really shift you into a very positive space.  and here’s something even cooler is that being more optimistic is actually has been linked to saving money. So, when you feel grateful, you’re less likely to kind of spend and splurge maybe on stuff that you might not need. , and if you’re, you know, more optimistic, you’re also likely to stay active and healthy, which eventually means lower health care costs over the time of your life here. So, more optimism you have, it has been linked to some really good outcomes. So, really great, you know, technique when moving into retirement.

Great, okay. So, finding your passion. I think this is a really critical idea especially because what can happen when retirees you know work their whole career and they save and they build this nest egg, and they have these assets that are going to support them through retirement. You know you can get tied to an identity in your job. We have teachers, we have engineers, we have healthcare workers. All of these individuals, once you retire you are no longer a teacher. You are no longer working as an engineer, and you are potentially no longer working as a health care professional. And so, what can happen is there can be this feeling of who am I and what do I do? How do I live that sort of fulfilling you know lifestyle?

And so really what it takes is some work ahead of time if you haven’t done it yet or you’re approaching retirement to start to think about some of these things like what would your ideal day look like if you’re not going to be going to work every day? What are you going to do to fill that time?  You know when and how would you spend time with your family? Is there any hobbies that you would like to you know do more of the hobbies that you currently do or new hobbies that you’d like to try? And especially how does all this fit into your financial plan? So, making sure that you understand, you know, if these hobbies are expensive, can your, you know, retirement assets support you in doing those things while you’re sort of seeking sort of that new fulfillment in retirement and really having that sense of purpose. So, if our careers are going to let’s say fade out as our sense of purpose, what are we going to fill that with? And you can see that first box there, that loss of identity.

And that was really what I was talking about. If you were a teacher and you are no longer a teacher, you know, trying to fill that sense of purpose can be difficult. And this that transition between working and retirement is a it is a difficult transition because like I said, you’ve worked for so long and now if you don’t have that anymore, it can be kind of jarring. , and so some ex or some  recommendations would be is that you could work with a life coach or what you could also do is start to list out and write down physically, you know, what are some of these short-term and medium-term goals? What are the things that you would need to do to reach those one-year goals and what would you need to do year after year to reach some of those five-year goals? You know, stacking those together can give you direction of what you want to do in retirement. Another great idea to have a sense of purpose is to teach others, right? To share your wisdom. You’ve just, you know, if you’ve just retired or you’re nearing retirement, you’ve got a whole lifetime of experience and knowledge and wisdom. There are probably many younger people that would be very grateful to learn from you and understand what you know what that knowledge is that you have to pass that on to make sort of their lives easier or their career or their job or whatever it may be. and where you can you know provide that value.

You can certainly volunteer. So, you know, going to a website that can match volunteers. So, we’ve got one example here, but really you can find just about any topic in any industry that that that is interesting to you.  So, whatever your interests are, there are likely volunteer opportunities that you can you know enter that space and provide your experience and knowledge and then advance in a new hobby. So, you know, if there’s something that you’ve always wanted to try, let’s jump in, you know, it can be a little bit scary sometimes to try something new, because what’s scary, I think, about it is to go back to being a beginner, right? If you’re in retirement and you’ve worked your whole career, you were probably pretty proficient at what you did. But if you jump into a new hobby as a brand-new participant, we can then sort of revert back to, hey, we’re a beginner again. And it can be a little bit scary to try to be that beginner. However, it can be extremely rewarding to see yourself get better, right? You can see you advance in your skills and your abilities in a new hobby.  whatever it may be and whatever your interests are.  These are all ways to sort of bring back that sense of purpose that some people can feel when they you know move on from their career.

All right. So, we are going to go through a couple of questions that we have that are pretty common.  if these questions are not exactly your questions, that’s okay. You can reach out to us. We will make sure that you get a link to schedule a complimentary 15-minute introductory call, and we will certainly get somebody on our team to reach out to you and help answer your questions if the ones that we are going to review here are similar but maybe not exactly  the types of questions that you have. So, all right.

All right, Haley. So, one of the questions that I hear all the time, and I want to hear your I want to hear your wisdom on how you approach this question is the question that I get is you know how do I know that I will have enough to retire? How do you help people understand this problem? Yeah, it’s a really good question and we do hear it quite a bit. , unfortunately there’s no magic number as much as we would like to provide, because it really does depend on your situation, your goals, , and what everything you’re trying to accomplish within your retirement looks like. I will say though, creating that number or putting a number to goals that you’re trying to really reach. It’s important to really take a look at what your expected expenses look like within retirement. We talked about healthcare. We talked about some insurance needs that you may have. Getting an idea of what’s coming down the pike so that you’re prepared for anything that really pops up. Not only for future expenses is it important, but it’s also important to really boil down what your everyday costs look like. , we talk about, you know, when you’re in your working years, you may be spending more than when you’re in retirement because you may be commuting to your job, so you have gas expenses, you have car maintenance. When you’re in retirement, those needs may change slightly.

So, getting a good feel of what your base level needs look like and kind of creating a plan on X amount of dollars of spending per month is going to be my goal. and then really kind of backing into that with a long-term success of a projection. So, we use a financial projection tool. , it helps us really forecast how likely are you to  to prolong your portfolio and how likely is it that your portfolio will support your lifestyle and your goals as you age. , so really, you know, making sure that that all of your expenses are taken into consideration any future expenses that come up. , and then yeah, I would say that’s my answer. Sure. Another common question that I hear is, an individual might say, well, I have a will, you know, is that enough? And I would say that the answer is no. Generally, what you would want to do is have a more comprehensive estate plan. That would include things like a trust, the health power of attorney and the durable power of attorney like we discussed, and a will, and there’s a lot of different ways that you can execute those. Meaning, there are different types of wording that your estate attorney can put in there to achieve the goals that you that you want to have.

So, for example, if you have younger children, you may want to have wording in there that, you know, distributes assets to them if something were to happen at a predetermined ages. you know, if you if let’s say a young individual that’s say 15 years old is going to inherit a substantial amount of money,  you know, that there may be concerns about will it get wasted, will it be spent, you know, is it going to support them, you know, throughout their throughout their life. So, you can kind of control that a little bit.  whereas a will isn’t ultimately going to do that. , but I think what is potentially the more impactful thing is that if you have a trust  set up, health power of attorney, durable power of attorney, you can more easily  you can more easily avoid the probate decisions because that trust is going to lay out exactly what the rules and instructions are for your estate. And now this is going to be most appreciated by those who are going to be the ones responsible for your estate. So, after you pass the individuals that are going to you know inherit the assets that you have, this is going to simplify their life and it’s going to make things much easier and much smoother and just make the transfer of the assets go as well as it could go.

All right. So, another question that we hear is so is more about the kind of the healthcare. So, if I retire before I have Medicare, what would be my options? Yeah, this is a really great question because we’re seeing this more and more nowadays with individuals who are looking to retire prior to being Medicare eligible. So, you are eligible to start Medicare benefits at age 65.  however, maybe you are not interested in waiting to fully retire until age 65. Maybe you’re looking at age 62. So, really what are you what are you supposed to do to avoid having a lapse or a gap in your health care? Because we always want to make sure that you have some kind of coverage in the event of an emergency. You should always be covered. So, what can you do? So, there’s a few different things that that we usually recommend. First and foremost, we’ve seen a lot of individuals who have had residual benefits from an employer plan. So, for example, they may have worked at XYZ company and for retirees that company provides a kind of a residual benefit where they can have they can stay on that plan as a retiree. Maybe it’s a different premium but they continue to you know be in the same network, have the same set of doctors and that’s a really good offering. However, it’s not very it’s not the standard. It’s far and few between. So, not all employers have to offer any kind of retirement health care benefit.

The next option that you can really start to look towards is COBRA. So, you might have heard of COBRA. COBRA coverage, it essentially allows you to stay on whatever health care plan you’re on at your existing employer for a period of up to about 18 months after you leave that job. So for a retiree, if you are looking to retire at age, you know, 60, we’ll call it 63. You’re looking to retire at 63, you can elect those COBRA benefits, stay on your same health care.  I I’m not sure if anything changes. Maybe your policy number changes, but it’s essentially the same plan.  You stay on that, and then when you’re ready to bump over to Medicare, then you just kind of make that jump. So, the one thing to keep in mind about COBRA is that it is not a permanent health care plan. It is limited. So, it’s about 18 months, and the premiums for COBRA are typically much higher than they were when you were employed. Sometimes about 100%, maybe 150% higher. So, really important to make sure that you’re reviewing that information before just signing up for Cobra to keep your same insurance. If neither of those two options are interesting or you wouldn’t like to take those options, you also have access to what we call marketplace. So, the marketplace is really just a public area where you can buy insurance through private healthcare providers. , the costs really do range depending on a lot of different factors like your health, whether you smoke, things like that. But this is available for individuals to purchase if you are not currently covered under an employer.

So going to the marketplace, working with an insurance agent is also a really great way to make sure that you’re getting kind of the best bang for your buck. You may not need all the bells and whistles, right? So, an insurance agent is going to do a really good job of helping you kind of weed out and pick the policy that works best for you. My last kind of final point on this that might be an option is if you are looking to retire, maybe your spouse is still employed and you actually could just kind of jump onto their insurance plan prior to, you know, turning 65. So, that would be a really great way to avoid that lapse or gap in coverage to make sure that you’re still  covered in some capacity is, you know, your spouse would be able to start their insurance as long as they’re fully employed as well, offered by their employer and then you would be able to join as their spouse on that plan. So, some really great ways to avoid having any kind of gap in coverage. , but it is really important to kind of make sure that you’re thinking about these things before 65 because we do see so many people that retire prior to 65 and then they either forget or don’t include any kind of health care assumptions within their plan and that can really throw a wrench in things. Sure. So, the last question that we have I think is one of the most common is if you don’t currently have a financial adviser, the question would be when should I have a financial adviser? Is it you know, is it too early or do I need one at this at this stage in my life?  And I would say that the answer to this is probably the earlier the better because there are many different things that happen throughout our lives different eras of change.

So, whether you’re you know sort of in your early career with young kids, you know that’s one stage of life. If your kids are nearing school or let’s say college and you’re going to pay those expenses, that’s another area of life. If you’re nearing retirement, all of these things come with their own unique needs, their own unique plans, their own unique challenges. And working with an advisor is a really great way to help to have them help you think through what are my specific challenges? What are the things that I may have not considered when we make these transitions or get to these critical points in life?  so the earlier the better because then you can work through and make those plans ahead of time.  but also I would say is you know when there is that upcoming life change that is really a good time to sort of take stock and say is do I need to do something different right I’ve been managing my finances this whole time by myself things have been great you know I have what I think is a good nest egg to support me through retirement but is there something else that I need to consider  and the answer is usually yes  and it could be you know anywhere from taxes to estate planning to just maybe you know the more normal the more normal investment things like diversification or you know getting into the appropriate allocation from a risk perspective.

Just having a second set of eyes review those things  is extremely helpful when we have these periods of change and these periods that will  you know prompt us to take a second look at what we’re doing. So, if you can get out ahead of that and plan for those things before they get here, it’ll be a much smoother journey for you when those times, you know, when those challenging periods come up. All right, so I think that’s all we have for now. So, again, if you have at any time if you’re looking for more information about Savant and what we do, I certainly invite you to go to our website, which is savantwealth.com.  And then additionally we please schedule your free 50-minute complimentary call with us and we will certainly find somebody to answer your questions, tell you a little bit more about us and just sort of provide what you need  in those areas. So, thanks again and everybody have a great day. Thanks Chris. See you. If you enjoyed this webinar, visit savantwealth.com/guides and download our complimentary guidebooks, checklists, and other useful financial resources.