If you search the Internet for tips on financial strategies, you’ll see many general rules and broad advice that may apply to an “average” retirement saver or retiree. But the truth is, those general pieces of advice rarely apply to you in an actionable way. Instead, use them as a framework for asking yourself what you want from your retirement. Nobody can tell you your priorities but you, so if you set your sights on achievable goals, you can prioritize your spending, saving, and investment strategy to meet those goals.
A common cost to prioritize in retirement is healthcare expenses. As we age, we need to take care of our health in various ways – but doing so isn’t free. Exercising your body and brain, being social, and eating well are all parts of a healthy lifestyle that can help you live happily and healthily in your later years. But even then, increased costs come with maintaining that lifestyle as you age. But not only may you increase your usage of healthcare products and services, but you’ll also likely face increasing costs of those goods and services. So, preparing to save on those expenses is crucial. Proper Medicare, insurance, and annuity planning can help you reduce your healthcare costs in retirement.
Paying off debt is another expense to put at the top of your list to cover. Debt can eat away at your available budget and your overall wealth. Paying debt down should be seen as investing in your future. Whether it’s credit cards, mortgage loans, car loans, or leftover student debt, paying down debt can free you to spend your retirement the way you want.
Another way to prioritize your future is to claim Social Security later. If you can find a way to delay claiming Social Security benefits until you’re 72 and still cover your living costs, this may free up your budget later to afford something you’ve always wanted to do but was just outside of your budget. Or, it can help you cover other costs, such as healthcare or help speed up the process of paying down debt.
Ultimately, your financial priorities are up to you. Maybe you want your retirement to be full of learning experiences, so your 2023 goals may include saving for classes and education expenses. Or maybe you’re not retired yet and realize you want to retire early. In that case, your priorities may include increasing your savings plan and elongating your retirement timeline.
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Source: https://www.investopedia.com/terms/f/financial_plan.asp