However, as you approach your retirement years, it’s critical to have a clear strategy for how you’ll afford to live on a fixed income. You’ll also need to have an awareness of where and how your money is invested.

The nearer you approach retirement, the less risk you should undertake. Be aware of which options qualify as less high risk.

Consult with financial professionals to get their top recommendations on where to invest your money if retirement is on the horizon. Consider the following low-risk alternatives:

High-yield savings accounts

While part of your money should be in the stock market, it’s also a good idea to have some on hand in an easily accessible savings account.

When approaching retirement, it is essential to have a reasonable amount of cash accessible for short-term needs and eventualities.

A smart thumb rule is to have three to six months’ worth of money in accessible reserves. These should be divided between checking and savings. Have one to two months’ worth of expenses in your checking account and two to four months’ worth of money in your savings account.

As your life changes in retirement, make sure you’re storing enough to cover your new monthly expenses. Perhaps you downsized so that your expenses are lower. Maybe your expenses are higher because you have more medical bills or have moved to a new city.

A high-yield savings account allows you to earn more interest than a typical savings account. Your money is also FDIC-insured up to $250,000 per account type per bank.

Short-term bonds

After safeguarding some money in savings, look to low-risk investments that enable you to protect capital while also accruing a bit more interest than you would in a savings account. Short-term bonds are an excellent choice since they are less affected by future volatility.

The problem with low-risk investments is that rising inflation can erode their value over time. To counteract this, consider investing in Treasury Inflation-Protected Securities, or TIPS. These are government bonds that move in lockstep with the rate of inflation. They are not only a secure investment, but they also help you diversify your retirement income.

TIPS bonds pay fixed-rate interest twice a year and are available in 5, 10, and 30 year maturities, so you can choose one that best fits your retirement timeline. Investors are paid the adjusted capital or the original capital, whichever is greater, upon maturity.

As retirement approaches, one of the best things you can do with your money is to keep it safe and accessible. TIPS serve to manage rising inflation, whilst high-yield savings accounts and short-term bonds enable your money to grow with relatively risk.

Soon-to-be retirees should preferably consult with a financial advisor. They can evaluate your particular savings and investment plans to ensure they are on track for all of their targets.

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However, employment supplies us with much more than just money. What we do gives many of us a sense of meaning, purpose, and even identity. Work also offers us social relationships and structure.

Losing all of that can be unsettling, which is why expert including some who have already retired advise planning ahead of time for how you will substitute those qualities of employment.

Most individuals don’t crave a life of complete leisure. They want a feeling of purpose, important daily activities and relationships, and the flexibility to do whatever they want, even if that involves working.

A Typical Day

Retirement is frequently marked by a bustle of activity as people travel, see relatives, and indulge in beloved hobbies. However, retirement experts advise imagining a more normal day once you’ve completed some of your bucket list items. From the moment you wake up, how will you spend each hour? With whom would you spend your time? What will you say if someone asks you, “What do you do?”

Studies suggest that working during retirement is positively associated with higher levels of satisfaction. Part-time work can also help you gently transition into retirement.

Some individuals feel really worried about retiring because it does seem very final. Think about working part-time to have less work and more leisure time so you can ease into it.

Take a Retirement Test Run

You should put your retirement plan to the test before quitting your job. Consider taking a two-week vacation to do something you want to do in retirement, such as golfing, volunteering, traveling or caring for the grandchildren. If you are preparing to relocate to another place, you should consider renting a property there for a few weeks if possible. You might find that reality fulfills or exceeds your expectations. If not, you can change your plans before committing.

Consider how you will replace the social connections you enjoy at work. People who have strong social relationships are happier, healthier, and have longer lives. Spending more time with family and friends might help you invest in existing relationships both before and after retirement. Set aside specific days and times to communicate on a regular basis, either in person or through phone or video conference.

As you age, you will lose connections when people die or move away. Volunteering, joining community organizations, or simply getting to know your neighbors better can all help you meet new people. Companionship from a dog, cat, or other pet can help improve one’s mood.

Have a purpose

Without the framework of employment, some people begin to fade, with one day merging into the next. Setting objectives and working toward them can help restore a sense of purpose and accomplishment.

Stay healthy by walking 10,000 steps every day, eating healthy foods, and having at least 7 hours of sleep every night. It is critical to look after your physical well-being. In a 2014 poll, 81 percent of retirees rated good health as a critical factor for a happy retirement.)

Achieving defined, measurable goals can help people redefine their definition of productivity, which is crucial to many people’s sense of identity. Goals might also help to compensate for a propensity to postpone doing tasks.

People who are accustomed to saving and delaying gratification may have difficulty “flipping the switch” to simply enjoying their life. However, time, good health, and vitality are not limitless. Many people struggled during the pandemic not just because their plans were cancelled, but also because they were acutely aware that the clock was ticking.

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If Covid-19 influenced boomers’ careers (or decision to leave the workforce), it also influenced their home values. Because the majority of boomers are homeowners, they are likely to have profited from the spectacular increase in housing values across the country.

In the fourth quarter of 2020, 88 percent of housing markets in the United States experienced double-digit home price growth, with average national prices increasing 14.9 percent year on year to $315,900. This was a fortunate benefit to the bottom line for homeowners.

Today’s homeowners who wish to cash in on their equity without taking out a home equity loan must downsize, relocate to a less expensive area, or find other living arrangements that do not necessitate re-entering a strong market for sellers.

While some Baby Boomers are selling, others are moving to vacation properties. They are, for the most part, downsizing. Another tendency is that South Carolina and Florida are attracting a significant number of Baby Boomers.

In 2020, this group aged 65 to 73 sold their homes at a higher pace than any other age group.
Baby boomers were also the group most likely to be moving the greatest distance after selling, with the average distance of about 40 miles.

Most retirees base their relocation decision on where their children live. Clients usually want to be closer to their children or grandchildren. However, if the couple does not have children, they may not have the desire to reside so near to immediate family. Instead, they seek their ideal retirement house. This is usually near or on a golf course, a beach, or a warm-weather attraction.

Unsurprisingly, the top ten most popular destinations for seniors to look for homes were all in Florida. According to a Realtor.com survey, the Sunshine State areas that drew homebuyers were all near beaches, with the exception of Ocala, which is located in the state’s center. The site studied for-sale listing views for properties across the country that originated from inhabitants of 371 postal codes with at least 40% of the population aged 65 or older.

Markets in the Carolinas and Georgia were more popular in 2020 than some traditional Florida senior areas.

2020 Top Seniors Markets

Naples, Florida
Sarasota, Florida
Venice, Florida
Fort Myers, Florida
Vero Beach, Florida
Ocala, Florida
Delray Beach, Florida
Boca Raton, Florida
Bradenton, Florida
Punta Gorda, Florida

However, seven of the top ten lost share of views throughout the course of the year. The cities with the largest growth in view share in 2020 were:

Naples, Florida
Miami, Florida
Vero Beach, Florida
Southport, North Carolina
Myrtle Beach, South Carolina
Marathon, Florida
Savannah, Georgia
Okatie, South Carolina
Oak Island, North Carolina
Bradenton Beach, Florida

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