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Enjoy Your Retirement Road Trip

Updated: Feb 15, 2023

Covid-19 is causing disruption in our daily lives across just about every industry and household. Couple this disruption with a volatile stock market, remote working, social unrest, and the uncertainty creates a state of heightened anxiety. This is especially true when it comes to finances. A good way to reduce stress surrounding your finances is to focus on what you can control. 

A way to regain control and peace of mind is through preparation. No matter what stage you are in your career, having an action plan (even if it changes in the future) is a good idea. The items where you have the most control are how many years you will work, how much you invest before retirement, and how much you spend during retirement.

There are three main steps to retirement planning. Visualize what you want from retirement, estimate costs in the future, and review whether your finances will take you there.
happy esop retirees in go-go years riding a moped scooter motorcycle
Like a road trip, you may detour along the way but you will always be navigating towards your planned destination.

#1 Visualize what you want from your retirement.

Visualize your future as if you are planning for a road trip across the country. Why a road trip? Well, simply because, like a road trip, you may detour along the way but you will always be navigating towards your planned destination.

As you are imagining this road trip, answer 3 questions:

  1. Where do you want to live?  Budget for the lifestyle you want tomorrow.

  2. Who will be there with you?  Plan to support yourself, a spouse or partner, and possibly others.

  3. What do you want to do when you arrive?  Estimate the time and costs for your hobbies or interests such as travel.

If any other questions come to mind, add them and answer them (then message me so I can hear your thoughts on this exercise).

#2 Review your current expenses to estimate costs in the future.

What will you need to get you to this place? Assess whether your current income is enough, or you will need more money to enjoy retirement. If your mortgage is paid off, you may need less to live on. If you plan to travel extensively and take up new hobbies, you may need more income especially during the first 10 or 15 years of retirement.

Check to see if you are on track. Download the One Day I Want to… Retirement Roadmap Workbook, a guide that will help you get started in aligning your life’s vision with your finances.

#3 Review your finances to estimate if you are on track for your goals.

Before a road trip, I will always point check my vehicle. Am I due for an oil change? Are my tires in good condition? Am I current with AAA membership? With retirement planning this point checking comes down to three things: time horizon, savings rate, and your goal.

  1. Time Horizon. Knowing how long you have until you reach your destination. Consider the difference of a couple years. What will happen to your retirement funds if you retire 2 years early or 3 years after your desired goal? How long your money can be invested and remain untouched gives it more opportunity to grow.

  2. Savings Rate. How much of your annual income are you putting away for the future? It is recommended to place a minimum of 15% of your paycheck into savings. 

  3. Your Goal. Typically the goal is to replace your income at retirement. Based on your visualization exercise and cost estimate, what would you be comfortable with annually?

If you are just getting started, the first step is to build up six months of emergency savings and make sure you are taking advantage of the company sponsored 401k investment match. 

If you are further ahead, you can use the Income Replacement Calculator to create a personalized retirement income projection using your investment balances and regular contributions. Follow this example as I help my friend Jamie use this calculator

Final thought.

Does the thought of retirement planning cause you anxiety? Are you close to retirement and overwhelmed by dips in your investment accounts or diversification of your company stock? 

I’d like to help you and bring you peace of mind. Let Peak Wealth Planning be the mechanic for your finances.

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About the Author

Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.

Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.


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