It’s natural to have mixed emotions about retirement – it’s a huge life change that people use most of their working life preparing for. While the thought of retirement is exciting, the options and advice obtainable can sometimes seem overwhelming and complicate. There are several simple things you can do if you’re feeling unprepared for your retirement years. Check out the following steps to help you get ready for this meaningful development.
1. Determine your vision. One of the most enjoyable parts about planning for retirement is deciding how you’ll use your time. Though you could just be looking forward to relaxing, you may also decide to move to a different area of the country, travel, volunteer or use more time with family and friends. Your plans can always change, but creating a list of activities you may want to pursue is a valuable and fun part of the planning course of action.
2. Start with the basics. Developing a written plan is the first important step, but before you get caught up in the numbers, determine what you will absolutely need to cover expenses that are truly basic. Include basics like groceries, mortgage payments, healthcare costs and other financial obligations. You may want to make a list of areas where you could cut back and reduce your expenses if you hit a financial roadblock in the future.
3. Make your plans concrete. Many people get hung up on this step, as it can come with a tough reality check. To begin, calculate how much money you’ll need to cover your essentials over the time of a 30 year retirement, and then add discretionary expenses that join activities and lifestyle goals – such as travel and hobbies. Be honest with yourself and try to explain cost-of-living increases and rising healthcare costs in your projections. This will give you a rough calculate of how much “income” you’ll need in retirement to replace your paycheck and unprotected to your desired lifestyle. Then consider all the supplies you can draw this income from – such as a 401(k), annuities or cash savings. Also consider breaking this amount down into smaller goals that you can more easily prioritize, manage and track.
4. Protect your plan and your legacy. Ensure the beneficiary information on your accounts is up-to-date and that you have the right insurance and protection plans in place to safeguard your income and assets now – and for the long-term. Also begin thinking about the legacy you want to leave – to your family or to organizations that are important to you. include your loved ones in these conversations and clearly communicate your intentions and expectations.
5. Track your progress. As with all goals, it’s important to set milestones, check-in and mirror as you go. Keep in mind that a little time and organization goes a long way. Set aside one day each month to sit down with your finances, and also consider meeting with a legal and financial specialized yearly. already if your goals nevertheless seem far away or if you’ve experienced a setback, you won’t regret spending the additional time to review your progress. This also provides a good opportunity to make adjustments if your situation or plans for the future have changed.
Retirement planning can be a complicated, emotional and overwhelming course of action. Consider seeking objective advice from a specialized financial advisor who can guide you by it and ensure you’re aware of all your options. It’s important to keep in mind that the surest way to feel confident about what’s to come is to do everything you can to prepare for it.