[Updated article; original publish date 5/8/20]
Your retirement is unique to you
Just search “things to do in retirement,” and you’ll find lots of lists—but the best list is your own. Start by asking yourself: “What do you want to do?” and “How and where do you want to live?” Your lifestyle choices will influence your spending in retirement, which in turn affects how much you need to save today.
Four lifestyle considerations
Think of retirement as your reward for years of hard work. Now picture what that reward looks like. Maybe you want to be part of a retirement community where you can socialize and make new connections. Or maybe you prefer to settle in somewhere quiet and relaxing—in the mountains, by a pond, or near the ocean.
Here are four things to consider to help you plan.
1 Activities—You may be thinking that you’ll have plenty of time for golf, tennis, or even pickle ball. But then again, perhaps being close to bike paths is more your speed. Would you like to spend time volunteering or taking classes? As you think about future activities, consider how much they’ll cost.
2 Work—Even when you’ve retired, you may still want to work or maybe open a small business. Forty-two percent of workers plan to have a job in retirement, yet just 16% of retirees actually do.1 As you plan your income and expenses in retirement, be realistic about how much money you’ll be able to earn—and for how long.
3 Real estate—Do you plan to downsize, spend more time at a vacation home, or move to a bigger house? Do you prefer a rural, suburban, or city setting? Do you want to live in a warmer or colder climate? The type and cost of housing can vary widely by geography—and whether you move or stay put is a big decision.
4 Family—How about your immediate family? If you’ll be taking care of grandkids or elderly parents, you’ll want to be close by. Otherwise, a quick car trip or even a direct flight away may suit your needs. And if you won’t be living near family, you may want a home or vacation spot that has space for visitors.
Cost-of-living considerations
The next step is to make sure you’re planning and saving enough to make your vision happen. Having a formal plan can help you set your retirement savings goal and keep you on track.
Basic expenses—Once you have an idea of where you want to be, check out the cost of living and how it compares with where you are now. If you’re likely to eat out or go to the movies and theater, estimate those costs as well.
Extra fees—Next, think about costs for anticipated travel or vacation properties. Consider memberships for fitness centers, golf clubs, or tennis courts you’d like to join. And don’t forget to count home maintenance costs to replace that roof or build that new addition you’ve been wishing for. While you’ll have new expenses in retirement, you’ll leave some behind, such as the costs of commuting and buying lunch each day.
Health—Make sure you factor the cost of healthcare and long-term care into your plans. These are two of the largest expenses you may face in retirement, and Medicare won’t cover everything.2 Additionally, the cost—and quality—of healthcare can vary depending on where you live.
Taxes—If you’re thinking of moving, taxes can make a difference. Do the areas you’re considering charge taxes on everyday goods—and if so, how much? Some states don’t have state income taxes, but the trade-off could be higher property taxes. If you’re a U.S. citizen living outside the United States, you’ll still need to file a tax return each year.
Picture your lifestyle in retirement and start planning today
Retirement is a chance to do what you want—so what do you want to do? Thoughtful planning now helps open the door to a retirement that matches your dreams.
1 John Hancock’s 10th annual Financial resilience and longevity survey, John Hancock, Edelman Public Relations Worldwide Canada Inc. (Edelman), June 2024. This information is general in nature and is not intended to constitute legal or investment advice. Edelman and John Hancock are not affiliated, and neither is responsible for the liabilities of the other. This report presents the results of research conducted by Edelman on behalf of John Hancock. The objectives of this study were to (1) quantify the financial situation and level of financial stress of John Hancock plan participants and American retirees; (2) determine the key triggers of financial stress; (3) understand the extent to which actions, including actual financial behavior and planning activity, ameliorate stress; (4) assess longevity and retirement preparation and readiness; and (5) investigate custom insight around how retirees are faring in retirement. This was an online survey comprising two participant samples: John Hancock plan participants and American retirees. The John Hancock plan participant sample comprised 2,623 John Hancock plan participants. The survey for this sample was conducted from 5/17/24 through 6/3/24, with an average survey length of approximately 18 minutes per respondent. Respondents were located from a list of eligible plan participants provided by John Hancock. The American retiree sample comprised 525 retired Americans, sourced through Angus Reid’s research panel. The survey for this sample was conducted from 5/13/24 through 5/28/24, with an average survey length of approximately 12 minutes per respondent. All statistical testing is done at 0.95 significance levels. Percentages in the tables and charts may not total 100 due to rounding and/or missing categories. 2 “Projected Savings Medicare Beneficiaries Need for Health Expenses Continued to Rise in 2024,” EBRI, 3/6/25.
