In life, we want everything to be exactly how we want. We plan certain things and expect our future self at a certain position. But the sad reality about life is that it is full of uncertainties. More often than not, things go south and we find our future selves at a varyingly different place and position. With that said, retirement planning is no exception.
Retirement plans often go unattended due to financial uncertainties. That is why, it is pertinent to set out well-strategized retirement plans. Given this inevitability, we reached out to Andy Lapointe, who had served as a financial advisor for 15 years. Below are the 3 biggest retirement planning lessons that we can learn from a retired financial advisor, Andy Lapointe:
Zoom Out Your Post-Retirement Lifestyle
“First thing first. Before you plan for your retirement, zoom out your post-retirement lifestyle,” says Andy. What he means by “Zooming Out” is imagining and picturing yourself after getting retired. This includes: How does your post-retirement life look like? What kind of lifestyle are you looking to spend? Are you looking to age with dignity, etc?
Likewise, picturing your future self as a retired individual will pave the way for designing a sensible retirement plan. Depending on the status of your future self, you will be in a position to strategize your retirement plans. These pans will be realistic and reliable as per your post-retirement life.
For instance, if you are looking to be adventurous and a traveler in your post-retirement life, you will have to be curious about the money that will suffice your desire. Similarly, if you want your future to spend quality with your partner, kids, and grandkids, you will have to plan your retirement plans in accordance with that.
2. Figure Out Passive Income Sources Before Retirement
The second important lesson, that Andy shares, is finding passive income sources and streams. “Passive income streams are underrated,” Andy argues. Similarly, he goes on to say, “But if you figure out a passive income stream earlier, you will have enough savings by the time when you enter into the retirement stage.”
Essentially, passive income is a source of income that does not require your active energy, money, and time. “Investments like real estate are reliable sources of passive income today,” suggests Andy.
3. Emergency Funds are Inevitable
“Emergency funds are inevitable, given the financial uncertainties of life,” Andy argues. It is not unheard of that in life we are bound to face an emergency. Be it in the shape of a health crisis or a financial one, emergencies are very likely to happen.
That is why it is a worthwhile idea to prepare yourself for such uncertain situations. And nothing could be better preparation than realistic emergency funding and saving.