How can I plan for a successful retirement?

Questions you can ask your UBS Financial Advisor:

  • What steps do I need to take to get on the path toward a successful retirement?
  • How can I broaden my perspective for what the future might hold – and prepare for the unexpected?
  • How can I best segment my assets to meet all my objectives in retirement and still build a legacy?

As the baby-boom generation enters retirement, new insights from today’s retirees have much to teach wealthy investors on the cusp of retirement. For retirement to be successful, you need to overcome cognitive and emotional challenges to be ready for the new chapter in life, according to a recent UBS Investor Watch survey.1 For pre-retirees who don’t have clear reasons for retirement and don’t plan in advance, their transition can be a stressful one.

How about for you? How do you start planning for your transition to a successful retirement? And what can you learn from retirees who have made the transition into the kind of life they wanted?

CIO Americas, Wealth Management (CIO-A WM) offers insight on how to plan for a successful retirement and well-being in the third edition of the new series: Modern Retirement  Monthly (PDF, 421 KB). While income and wealth contribute to overall happiness and life satisfaction in retirement, there is more to the story.

Assess your retirement readiness

Choosing when to retire may be one of the most important and challenging decisions you will ever make – and with this decision you face both opportunities and challenges. Many investors see retirement as an opportunity to do everything they never had time to do while working. However, there are many tough decisions to make: transition slowly or take the full leap, downsize, move to a vacation home or live closer to family. And what about health issues and developing a plan for your children’s futures? All of these decisions matter as you plan for your next phase of life.

Happiness in retirement

Multiple studies on well-being and life satisfaction suggest that aging is not indicative of a decline into misery. On average, the relationship between age and life satisfaction maps to a U-shaped curve, even when accounting for factors such as gender, marriage, having children in the house or being unemployed. People in their 20s start out happy; around age 50 they tend to hit mid-life crises; and after age 65, they finally find their happiness. In addition, for an average person, the levels of stress, anger and worry decline with age.2

Define retirement goals

Lifestyle changes, anticipated emotions and uncertainty about what to do in retirement contribute to the element of stress and anxiety that can make the transition hard. Retirement can be one of the most stressful events you experience, so planning in advance is a critical first step. What is it you’re trying to achieve over the next 20 to 30 years? Studies show a strong positive correlation between retirement planning and eventual retirement satisfaction.3

Once your retirement goals are established, then your assets can be aligned across three key dimensions using a comprehensive wealth management framework: Liquidity (to fund short-term spending needs to maintain your lifestyle); Longevity (to provide for long-term spending needs in order to improve your lifestyle); and Legacy (to provide for multi-generational aspirations in order to improve the lives of others). This framework is flexible enough to adapt to individual needs, yet structured in a way that it provides a disciplined approach toward meeting objectives.

Prepare to live longer

The good news is that Americas are living longer than at any time in history. And, perhaps counterintuitively, life expectancy advances for those who live into old age. Recent UBS Investor Watch findings indicate that while wealthy retirees are confident about their financial stability, 73% are worried about getting sick and 47% are worried about not having anyone take care of them.1

Plan for health and long-term care costs

Good retirement plans need to account for healthcare costs and the potential need for long-term care (LTC). But despite healthcare concerns and rising costs, only 12% of Americans think about healthcare costs when planning for retirement, according to the Journal of Retirement.4 It’s also important not to forget about LTC, as these expenses can have a significant effect on an overall financial plan, but many investors are not prepared for the potential cost.

For more on how to plan for the transition into retirement, read the full report (PDF, 422 KB).
How are retirees finding happiness and seeking growth? See our infographic (PDF, 93 KB).

Are you prepared to reach your goals in retirement? Together we can find an answer. Connect with your UBS Financial Advisor or find one.

  1. UBS Investor Watch 3Q17: Retiring old clichés
  2. PNAS, June 2010 and Pew Research Center, October 2014
  3. Financial Services Review, 1999
  4. Journal of Retirement, 2017