No matter how much retirement planning people do, the transition of leaving the workforce catches many by surprise. There’s good reason for that. In most cases, retirement is an environment completely unlike any other era in our lives. Adjustments to a new lifestyle and financial realities can be hard to adopt.
Focusing on four general areas of retirement planning can help the transition along. By centering on your goals in relation to these areas, you can make better decisions about moving forward. Here are four steps to take when it’s time to move on from working life.
1. Develop a Sustainable Withdrawal Strategy Once You Leave the Workforce
Your paycheck may have stopped coming during retirement, but, unfortunately, your bills won’t. One vital part of retirement planning is finding a manageable way to withdraw funds while preserving the wealth you have. The spirit of this, says Jesse Kuusisto, is that “even in retirement, your financial plan has to work just as hard as you did during your career. The right withdrawal strategy balances freedom today with security tomorrow.”
Some retirees set a fixed annual percentage (often 3% or 4%) for taking distributions from their retirement funds. Others base their withdrawal amounts on their spending needs or overall market performance, giving them more flexibility in adverse market conditions.
There are functional considerations to think about as well. Depending on the type of retirement fund you have, taking distributions could be subject to minimum withdrawal requirements and taxation. The key is to develop a strategy that fits with your lifestyle and long-term financial goals. Whatever approach you decide on should make your money last as long as you do.
2. Understand Your Healthcare Coverage and Risks
Medical and health needs become more complex as we age. How they may evolve is important to grasp, especially since you no longer have an employer-sponsored plan to depend on.
If you’re over 65, Medicare may be the foundation of your current health plan. However, there are many medical needs Medicare doesn’t cover. To close the gaps, you may need supplemental coverages like prescription drug plans, Medicare Advantage, or Medigap. If you’re still under 65, you may need to compensate for coverage gaps with private insurance, COBRA, or other marketplace plans.
Think carefully about obtaining long-term care insurance or level term life insurance. Without proper coverage in place, just a single extended illness can deplete your savings in short order. Factoring long-term healthcare into your retirement planning can safeguard your well-being and the wealth you’ve worked hard to build.
Jesse Kuusisto shares, “As a financial advisor, I’ve seen how one unexpected medical event can shift an entire retirement plan. Proactive healthcare planning isn’t optional, it’s essential.”
3. Revisit and Rebalance Your Investment Strategy
Your investment incentives change when you leave the workforce. You’re no longer focusing exclusively on growing wealth. Now you’re aiming to preserve capital and possibly looking for investments that generate some passive income. Jesse Kuusisto says, “The shift from growth to preservation doesn’t mean abandoning the market; it means engaging with it more thoughtfully and with purpose.”
Some principles of investment growth still apply. Portfolio diversification remains a solid way to safeguard your nest egg by balancing risk mitigation and reward. Occasional rebalancing is a worthwhile practice. So is structuring regular withdrawals from multiple funds around their tax efficiencies, especially in your early retirement years. This area of retirement planning is one in which a qualified financial advisor could be a godsend.
4. Redefine Your Purpose and Daily Structure
There’s more to think about in retirement besides finances. Many retirees are surprised by how much they enjoyed the regularity and social constructs of the workplace they no longer have. They need to adjust their perception of what gives their life the meaning it has.
The good news is that there’s no shortage of opportunities. Learning a new craft, volunteering, traveling, and working on passion projects can bring variety and reward to your life. You can even consider a part-time position or a consulting business to generate income. Whatever you choose, prioritize your mental well-being and self-care as you think about where you’re headed next.
Retirement Planning Dedicated to Your Needs
These four steps can bring clarity and structure to the transition out of the workforce. Retirement marks more than a financial shift; it’s a significant life change that deserves thoughtful guidance and personal support.
For more than 25 years, Laurel Wealth Planning LLC has helped individuals navigate retirement with a focus on trust, reliability, and long-term clarity. The team is known for listening with empathy, acting in clients’ best interests, and going the extra mile to ensure every plan reflects each person’s goals, values, and lifestyle.
Ready to take the next step? To schedule a complimentary meeting, contact us online, email laurel.wealthplanning@laurelwealthplanning.com, or call (952) 854-6250. Find out whether the Laurel Wealth Planning team is the right financial advisor for you based on your wants and needs.
About Jesse
Jesse Kuusisto is a Wealth Manager at Laurel Wealth Planning, a full-service, fee-only firm based in Minneapolis, Minnesota. As a skilled CERTIFIED FINANCIAL PLANNER® professional, Jesse excels at bridging personal and financial goals, developing client relationships, and properly implementing investment recommendations. Joining the LWP team in 2017 as an Associate Wealth Manager, he was promoted to Wealth Manager in 2021 and added the role of Investment Operations Manager in 2022. He shares, “I enjoy collaborating with clients to create a financial plan as well as implement it. It is the perfect way for me to utilize my analytical mind and help people at the same time. The high standards to which Laurel Wealth Planning holds itself give me a strong sense of pride in the work I do. I feel my values align with those held by the individuals at Laurel Wealth Planning and I am honored to be a part of the team.”
Jesse’s passion for wealth management began in high school during a stock market simulation. He graduated with honors from Augsburg College, earning a Bachelor of Arts in Finance with a minor in economics. While in college, he was the Accounting/Finance chair for the Augsburg Business Organization and captain of the track and field team. Outside of work, Jesse enjoys staying fit, spending time outdoors, and following Minnesota sports, particularly football. He values close relationships with his family, including his twin sister, and stays connected with friends through fantasy football. To learn more about Jess, connect with him on LinkedIn.
The foregoing content was prepared by Indigo Marketing Agency with verbiage, opinions and/or financial commentary input provided by Laurel Wealth Planning.
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