First Person: The 6 Pieces of Our Retirement Puzzle

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Planning for retirement can kind of be like trying to put the pieces of a jigsaw puzzle together. And if you don't account for all those pieces, your picture of what retirement could or should be like can remain incomplete. This is why I have tried to complete this puzzle well in advance to our potential retirement. It enables me to get a clearer picture of what we looking at now as well as down the road. And I've realized that there are six main pieces to completing this retirement puzzle.

Location and cost of living

Location can be a huge factor when it comes to retirement. Some of the main considerations in our retirement location planning include food costs, utility costs, available healthcare, property, income, and sales tax rates, and area amenities such as restaurants, libraries, grocery stores, and entertainment venues such as movie theaters, parks, and sports venues.

Having lived in the south, the Midwest (both urban and rural environments), and the west coast, I've seen just how big a difference there can be in costs when it comes to how location can affect our cost of living.

Income streams

Understanding our potential income streams is a critical piece of our retirement puzzle. Not only knowing that we hope to have income from sources like retirement accounts, pensions, Social Security, savings, and part-time work, but knowing the potential amounts that these sources could provide is essential to our retirement plan. By doing things like checking our estimated Social Security benefits online annually as, understanding the amount I could receive from my dividend reinvestment retirement plan by gauging its returns monthly, expecting to work part-time into retirement, and through other financial tracking and preparatory steps, we can be better prepared for this aspect of our retirement puzzle.


Inflation is a constant issue whether in our everyday lives or in retirement. If we're spending $30,000 a year now on our current expenses, and these expenses stay the same but increase in amount by just 2 percent for each of the next 30 years until retirement, we could be looking at an amount of over $54,000 by the time we retire. However, inflation may have more of an impact in retirement when it can not only affect how our costs increase, but how some of our income increases by way of Social Security through potential cost of living increases (COLAs). At least in retirement, while such COLAs aren't guaranteed, we can hope that these cost of living increases may at least regularly cancel out some or even all of the personal inflation we face.


Knowing our personal inflation rate through expense tracking helps us better gauge and understand our expenses and how they may grow as we move toward and into retirement. Pinning down costs on things like a mortgage, home repairs and maintenance, travel, debt, food and entertainment, and healthcare now gives us a present value base upon which to build as we forecast for what these costs will look like using inflation numbers and a future value calculator.

Work and hobbies

I was reading an article on retirement the other day and in the "comments" section, a woman noted that her retirement actually cost more because she has so much time to do more things now. When she was stuck in an office all day, five days a week, she didn't have the opportunity to go out and spend money.

Therefore, we have to look at the hobbies we plan to have in retirement and whether these types of entertainment options or venues will cost us money and in what amounts. However, for some people like me, who enjoy their work and consider it somewhat of a hobby -- or who do other things like go to garage sales or grow a garden -- such pastimes could save or even make us money in retirement.

Estate planning

The final piece of our retirement puzzle revolves around estate planning. With two kids now, this aspect has become even more prevalent in our lives as of late. Some of our retirement goals have now shifted to focus upon ensuring that the kids are considered in our financial planning. Laying out things like burial and funeral arrangements, who has power of attorney, what our wishes regarding health and medical situations are, as well as the process for dividing our estate are all things we want to make sure are set up in advance to retirement in order to make our eventual passing easier for our family.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Calculations have not been verified by a professional. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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