Cooke Wealth Management

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Go-Go, Slow-Go, Then No-Go: How CWM Empowered This Active Senior Couple To Travel And Responsibly Plan Their Retirement

Many Americans dream of traveling in their retirement years, experiencing the sights and sounds of the places they've always hoped to visit. 

According to one survey, 57% of people name travel abroad as their top priority in retirement, and 51% say they plan to seek out new experiences. 

Travel is expensive, though. Even if you carefully avoid pricey hotspots or trendy trips, costs for transportation, lodging, and food alone can add up fast. 

At Cooke Wealth Management, we focus on helping people plan for a long and active retirement that includes travel, ministry, and other life goals.

Two of our clients, long-time Orange County residents, approached us about their upcoming retirement.

“What do you want to do when you retire?” we asked them. That's always our first question. Once we identify what your retirement goals look like, we can help you develop a realistic plan that empowers you to actually do those things.

This couple knew exactly what they wanted: a new house outside of Orange County and to travel in their spare time. With these two clear goals in mind, we could help determine what travel would look like, set reasonable expectations, and forge pre-retirement plans designed to maximize long term financial benefits.

Working together, we devised a plan that would allow this couple to keep doing the things they valued throughout the twists and turns of a long retired lifetime.

Key Challenges to Traveling in Retirement

People are living longer, healthier lives. In 1960, men in the U.S. lived to an average of just 66 and women to around 72. Those numbers have soared by about a decade and continue to shoot up. Many Americans are even living well into their 90s.

As a result, retirement savings have to stretch further than ever.

While travel is rewarding, it's not cheap. As a result, many more people plan to travel in retirement than actually do so. Some of the roadblocks to travel include limited money and competing for financial priorities.

Limited Long Term Savings

Active living gets expensive. As you plan for many years of active retirement, the assets you accumulate during your working life have to stretch farther and do more than our parents' wealth did. 

Proverbs 21: 20 said it best. "There is a treasure to be desired and oil in the dwelling of the wise, but a foolish man spendeth it up."

You don't want to burn through everything you've carefully saved for decades by living it up during the first few years of your retirement. That strategy can leave you with few resources to fund the many years of life you may have left.

It's not uncommon for older people to run out of money in retirement. 

Research by David Blanchett, head of retirement research at Morningstar, and Warren Cormier, executive director of the Defined Contribution Institutional Investment Association’s Retirement Research Center, found that 46.1% of older Americans died with less than $10,000 in financial assets.

Careful planning can help preserve retirees' wealth while using it to fund the lifestyle they expect to live after their working years are over.

Competing Retirement Priorities

Older Americans may name travel as a top goal for retirement, but it's not their only priority. The Orange County couple we helped also wanted to move to a new home out of the area. Many retired people plan to relocate.

Each year, about a million people move after retirement. Some older adults want to be closer to their grown children. Others plan to seek less expensive or more temperate climates. And others want to move into planned communities.

Whatever the reason, moving can prove to be costly. If you're relocating to a better area, be aware that top retirement hotspots such as Hawaii, California, and Oregon offer many amenities but can come at a high cost. 

Moving doesn't have to mean crossing state lines, though. For some retired Americans, it simply means relocating to a newly built, single-story home with accessible amenities and a small lawn. Even this kind of transition can require a lot of cash on hand and may trim the travel budget

As time moves on, though, many retirees find their attention shifts closer to home anyway. Sound retirement planning requires factoring in the differences in mobility throughout retirement.

At CWM, we divide retirement into three eras: the go-go years, the slow-go years, and the no-go years.

The Three Phases of Retirement

As health spans increase, retired Americans are able to travel and enjoy hobbies and volunteer work. The early, active phase of retirement — what we call "the go-go years" — can last for about two decades. Many of our clients use these years to serve God in fresh and exciting ways that employment didn't permit. Others continue to work part-time, reducing the stress on their retirement savings.

Retired people in the go-go years can easily assume that their freedom and financial independence will last forever. This rarely happens, however. A new phase will come.

During the slow-go years, retirees often establish predictable routines that they find emotionally satisfying. Developing these patterns helps people conserve energy so they can invest themselves in family, ministry, and what matters most to them. In this season of retirement, many Americans still enjoy traveling but may choose destinations they can drive to rather than boarding an international flight.

In the final phase of retirement, older Americans may curtail their ambitions and activities due to physical, mental, or financial constraints. Spending on healthcare and practical living assistance may increase during this time, depleting retirement accounts.

Throughout retirement, your budget will determine your lifestyle. But your lifestyle in the go-go phase will go a long way toward setting your budget in your later years. 

How CWM Can Help Build a Practical and Sustainable Plan

With our clients in Orange County, we took into account this three-stage approach. Together, we considered factors such as managing medical costs, changing lifestyle expectations, increasing healthspan, and inflation and financial cycles. 

Our CWM team helped our clients develop a prudent financial plan that empowered them to achieve their goals of travel and relocation. Specifically, we worked together to:

  • Help plan retirement income using part-time work, 401k accounts, and savings and investment instruments.

  • Map out likely expenses during travel. By doing this work up front, our clients could pick travel experiences that were memorable while staying within the ambit of their long-term savings targets. 

  • Account for the black swans and financial downturns. Like life, retirement is full of unexpected surprises, including bear markets, inflation, and rising health care costs. Planning ahead can help mitigate the effects of these negative events.

If you expect to live an active life after retirement, reach out to CWM today. We can help you build a sustainable plan to accommodate your travel needs and long-term financial sustainability.