The gargantuan task of retiring in Lafayette, CO can be confusing, overwhelming, and time-consuming. In this article, we’ll discuss how much money you need to have saved up in order to retire there, what to do if you don’t feel you’re prepared for retirement yet, and the steps you should take to get there.

Sound okay?

But first –

As a CPA and fee-only financial advisor, we charge one straightforward fee for the investment assets we manage. Our compensation is tied to the growth of your portfolio, ensuring our success is measured by your success — not by transactions or commissions.

We think it’s fairer that way.

Agree?

Because we are ultra-focused on helping you make smarter financial decisions – not just selling you products or trying to find the next hot stock tip – we entertain questions and write them up on our blog. And that’s what we’re doing this month with our blog about retirement in Lafayette, CO.

And, we’ll try to answer it in two minutes or less.

Check out these blogs below that we’ve written about various financial planning topics for Boulder County retirees.

Are Roth Conversions Worth It?

How Are My Real Estate Assets Included in My Financial Plan?

False Sense of Precision

Now for the feature presentation!

Two Minute Take

Thanks for consulting with us on this important decision! So here’s our take on the things you need to know about how to retire in Lafayette, Colorado. We’ll try to cover the following in two minutes or less:

• How much money do you need to retire in Lafayette and what if you don’t have it yet?

• Is Lafayette a good place for retirees?

• Steps you should take if you decide to go for it

How much money you need to retire in Lafayette, Colorado

The question of how much money you will need is quite personal. As an aside, nothing in this blog may be interpreted as financial advice specific to any one individual; for recommendations specific to your situation, consult with a financial advisor.

You would arrive at the answer to this question by creating a financial plan that outlines your major goals. What milestones do you see in between where you are now, and where you want to be at retirement? Is that the only goal or are there related goals you’d want to accomplish at the same time as retiring (buying a home, downsizing a home, donating to charity, etc.)

The actual number comes from a process of careful calculation and development of a financial plan. The inputs are your expenses, current and projected, as well as a tabulation of all income streams. Factors such as the cost of living in Lafayette, inflationary influences there, and the real estate market in the area will play a part. There are online calculators you can use to figure all this out. Some people may be able to retire on $500,000 while others, based upon their living needs, may need in the millions.

If your retirement plan reflects a shortfall of the amount needed to retire, try to boost your savings as much as possible in the time that you have. There are tax-advantaged accounts such as 401(k)s and IRAs that allow your savings to grow tax-free, although the tax you’ll pay when you take distributions varies from one type to the next.

Is it a good place to retire?

Before you head down that path, it’s useful to think about whether or not Lafayette is a nice place to live, if you are a retiree. In our experience helping people to retire in Boulder County, here’s what we’ve heard:

Pros:

• Safe, welcoming community with small-town charm — Low crime rate and friendly neighbors make it easy to feel at home. Regular events like the Peach Festival, Lafayette Oatmeal Festival, and farmers markets create easy opportunities to meet people and feel connected

• Close to top-tier healthcare and essential services — Boulder Community Health and multiple clinics are just minutes away.

• Easy access to recreation and culture — Parks, walking paths, Waneka Lake, plus quick trips to Boulder, Denver, and the mountains!

Cons:

• High cost of living — Housing and everyday expenses are significantly higher than the national average.

• Dry climate and altitude — The 5,300-foot elevation can require an adjustment, especially for those with certain health concerns.

• Car-dependent for most errands — Limited public transportation outside of Old Town means may retirees need to drive.

How to get started: steps to take

Ah, so you decided you like the area and you want to retire here? The big question then becomes “How do I go about retiring in Lafayette?” Here is how the process normally goes.

• Before you set a date, notify your employer, or close down your business, it’s a good idea to check in with your financial plan. Have you saved enough? Or would it be a better option to keep working and accumulate a bit more money before you start to draw down on your portfolio? Will your income sources be able to replace most of your salary? What percentage will be replaced? Usually a good ballpark is to aim to replace 70% or more of your current income.

• Create a retirement plan, if you have not already. Consult with a financial planner in Lafayette, or create one yourself.

• Evaluate Social Security options. The full retirement age for Social Security is generally 67, but you can start taking benefits earlier. If you are haven’t started taking it yet, and your financial plan includes it as an income stream, figure out if it makes sense to do so.

• Secure healthcare. You can start Medicare at age 65. If you are leaving your job, you will need to find health insurance. Look at what Medicare premiums would be and what the likely costs are, given your medical history and needs. Get a plan for long-term care. Some folks purchase long-term care insurance, but it can be costly. There are insurance policies that extend coverage for long-term care using a rider.

• Create a withdrawal strategy. Map out how much you’ll be taking out of your accounts, when, and what the tax implications will be. Consult with a financial or tax advisor if needed, as this can get very complicated.

• Plan to stay busy. How are you going to occupy your time once you are retired? Lounging around all day sounds appealing but it gets old after a while. Other clients of ours who have retired in the Front Range have enjoyed [include some suggestions specific to the area].

Remember it’s never to late to start planning. Even if your retirement plan doesn’t look as rosy as you’d like it to, you can still improve matters by working hard in the time you have left.

Thanks for reading!

-Dwight

P.S.

We are a fee-only financial advisor in Lafayette, Colorado who help people with tax efficient retirement. If you’d like to meet with us to discuss retiring in Lafayette, how to create a financial plan for retirement, or any other topics related to your wealth, please set up a time.