Retirement expert details the ‘highest single correlation’ to success

Retirement expert details the 'highest single correlation' to success

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The key to a successful transition into retirement lies in many tactics, and preparation — both financial and nonfinancial — is among the most important, according to one expert.

“The single highest correlation to that success is the amount of time you spend preparing before retirement — not just on the financial stuff, which is obvious, and everyone does it, but the non-financial side is not as obvious,” Fritz Gilbert said. , author of “Keys to a Successful Retirement” and guest on a recent episode of Yahoo Finance’s Retirement Decode podcast.

According to Gilbert, who also publishes Retirement statement blogThe more time you spend planning for both aspects of retirement, the more likely you are to “find those things in retirement that will bring you the sense of fulfillment you hope to have in retirement.”

Many would-be retirees don’t start thinking about post-retirement plans until after they leave the workforce. However, Gilbert took a different approach, starting planning years in advance – a move he considers instrumental to his success.

“It definitely helps,” he said. “It has been proven that the more effort you put in upfront regarding this planning, the smoother this transition will be.”

In order to ensure that retirees have enough money to maintain their desired lifestyle, Gilbert recommended tracking spending even before entering retirement.

“You can’t retire without having a good spending baseline,” he said. “It’s arithmetic, ultimately. The more variables you can eliminate, the better your plan becomes.”

Read more: Retirement Planning: A Step-by-Step Guide

According to Boston College National Retirement Risk index39% of working-age families will not be able to maintain their standard of living in retirement.

In Gilbert’s case, he and his wife tracked all expenses for 11 months to establish a baseline and then adjusted for retirement by taking into account downsizing, travel, and other changes. Also use tools like the 4% rule (spending 4% of your portfolio annually) as a guide.

“See how that number compares to estimated spending,” he said, noting that if it’s close, you should be fine. But if it’s not soon, you’ll need to consider working longer or cutting back on expenses.

Gilbert also recommended the “90/10 rule.” Before retiring, the spreadsheet nerd said he spent 90% of his time thinking about money and only 10% of his time focused on the non-financial aspect of retirement.

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