While work can be rewarding and provide a sense of accomplishment, for most people, a job is a step toward one day no longer having to work. Whether you’re retired or trying to figure out how to retire, what’s the best way to ensure your decades of work continue to pay off?

The solution is no different than your working years. You need to establish a financial plan for retirement. The type of retirement you can enjoy will depend on your income stream and the decisions you make after you retire. Doing some financial planning for retirement now can help protect your nest egg while allowing you to enjoy the lifestyle you want.

Retirement Planning Guide: How Your Life Stage Determines Your Budget

Before the retirement party decorations are put up, you’ll want to be sure to establish retirement strategies to help you navigate the four distinct stages of retirement and each of their unique priorities. Here’s how to plan for every aspect of retirement and what to do for each stage.

Pre-Retirement (Age 50 to 62)

Pre-retirement is a good time to look ahead and estimate your monthly Social Security payment and any pensions and annuities you have. While you’ll be able to qualify for Social Security payments starting at age 62, doing so might not always be the best idea since your future monthly benefits will be permanently reduced. If you haven’t already, this is a good time to consider long-term care insurance to help cover unexpected health care expenses not covered by Medicare. It’s definitely something you’ll want to discuss with your financial planner.

In your 50s and 60s, you can still have ongoing expenses — like kids’ college tuition, mortgage payment or paying for a wedding — which can make it difficult to balance your current expenses with your plans for tomorrow.

Early Period of Retirement (Ages 62 to 70)

During this phase of retirement, you’ll want to choose the exact age you’ll retire, which will directly impact how much of your savings you’ll be able to access each month. Before you decide, look at how much more you’ll make if you delay your retirement to 65, 66 or full retirement age, 67. Be sure to also look at how early retirement can impact your IRAs, 401(k) accounts or any pensions.

Once you’ve worked out your postretirement income, you can then refine your budget to get a feel for your retirement expenses. During this time, you may be spending more on traveling and exploring new hobbies.

Middle Retirement (Ages 70 to 80)

During middle retirement, you’ll likely be receiving Social Security benefits, as there is no financial incentive to delay past age 70. Since you may be traveling less and staying home more, you could see your discretionary spending go down.

You may have created a will and estate plan when your children were younger because you wanted to make sure that, if something happened to you, they’d be taken care of. However, you might want to think about creating both a financial and health care power of attorney in case you become unable to manage your money or need someone to make your medical decisions. This is when many older adults start to think about moving to an independent living community that offers higher levels of care right on campus like The Hallmark.

Late Retirement (80 and up)

As you become less active in your 80s, you will likely see a reduction in your lifestyle spending. However, health care costs will probably become a higher percentage of your expenses because this is when medical spending tends to be the highest. Medicare will cover many of your costs, but you’ll still have out-of-pocket expenses for things like co-payments and deductibles.

Covering Retirement Healthcare Costs

The U.S. Department of Health and Human Services estimates nearly 70% of people turning 65 today will require some type of long-term care during their lifetime. The annual Fidelity Investments Retiree Health Care Cost Estimate report found a 65-year-old who retired in 2024 would be expected to spend $165,000 (after taxes) on medical expenses and healthcare during the rest of their lifetime. This estimate doesn’t even account for the cost of long-term care. To help cover their health care costs in retirement, many older adults turn to long-term care insurance and Medicare. That’s why it’s important to know about Medicare Parts A, B, and D as well as Medicare Advantage and “Medigap” supplemental insurance plans. Best to investigate aspects of Medicare online.

Here’s a short overview to get you started:

  • Part A covers hospital costs after you meet a deductible.
  • Part B is optional coverage for medical expenses and requires an annual premium. If you didn’t get Part B when you were first eligible, your monthly premium may go up 10% for each 12-month period you could’ve had Part B but didn’t sign up. In most cases, you’ll have to pay a penalty each time you pay your premiums, for as long as you have Part B. Moreover, the penalty increases the longer you go without Part B coverage.
  • Part D is for prescription drug coverage.
  • Medicare Advantage plans are all-in-one managed care plans that provide the services covered under Part A and Part B of Medicare and may also cover other services that are not covered under Parts A and B, including Part D prescription drug coverage.
  • Supplemental policies, referred to as Medigap policies, are offered by private insurance companies to supplement expenses that Medicare Parts A and B do not typically cover.

Compare Monthly Costs

If your current retirement plan is to stay in your home, it’s important to compare your current expenses to the cost of a senior living community, because it may be more affordable than you think. Be sure to consider all your housing-related monthly expenses which may include:

  • Cable, internet and utilities
  • Home maintenance and repairs
  • Homeowner association fees
  • House-cleaning services
  • Property taxes and insurance
  • Rent or mortgage
  • Transportation (upkeep, insurance, etc.)
  • Yard upkeep

As a homeowner, you’ll also have to plan for unexpected costs, like replacing broken appliances, repairing the sewer line or patching up a damaged roof.

At a Life Plan Community like The Hallmark, monthly costs are often more predictable and manageable because you won’t have unexpected expenses. Plus, you’ll have access to higher levels of on-site care including assisted living, memory care, skilled nursing and rehabilitation.

The Hallmark Is the Only Retirement Plan You Need

Your benefits and savings will have to cover your expenses for three decades or more. At The Hallmark, a not-for-profit organization, we’re sure to have a financial option to help you enjoy life now while making it easier to plan for every stage of retirement. Call us at 346-223-9741 or contact us here, for more information.

You can learn about the benefits of Life Plan Communities from Brad Breeding — an unbiased educational resource for older adults navigating the senior living decision making process — here.