A retirement plan is more than an idea or a casual conversation with your significant other. It’s a detailed description of how you are preparing for your life after retirement and what you want that life to look like. Furthermore, that plan will need to be updated when unforeseeable life events occur. Here are some tips that anyone can use when preparing for retirement.

Make your retirement checklist

Everyone’s retirement plan will be unique. But one thing all good plans have in common are that they are tangible. Make a checklist of things you need to accomplish before, during, and after retirement. Depending on your situation, this may include:

  • investment goals
  • savings goals
  • pension and 401k details
  • healthcare cost changes
  • social security benefits

Determine how much you’ll need

Lifestyle aside, retirement is expensive. And with inflation and cost-of-living increases it will likely only get more expensive. No one can predict, with 100% accuracy, what will happen in the future when it comes to stocks and investments. But when calculating your monthly expensive after retirement you should remember to adjust for increases in these costs.

Put your post-retirement expenses in a spreadsheet (estimate high). Next to them put your savings and post-retirement income. This will allow you to balance your monthly spending post-retirement.

Consider your housing situation

If the home you currently live in is the home you want to stay in forever, you might want to consider potential problems that may arise. As we age, things like steep stairs, lawns to maintain, and other issues may become a factor. Others elect to move into condominium-style housing. Many people don’t want to move too far from family, whereas others seek out better weather conditions. Whatever you choose, do your research in advance to learn just how much moving will cost (or save) you.

Don’t touch your retirement savings

Emergencies may arise when we need to put the present before our longterm plans. But it’s important not to fall into temptation of spending retirement savings on luxuries. Remember that financial troubles at retirement age are emergencies in and of themselves. Also keep in mind that there are often withdrawal penalties for taking funds from a retirement account.

Start your plan now and update it often

It’s never too early or too late to start saving for retirement. Whether you’re in your 20s or your 60s, there are always benefits that can come from good retirement planning.

If you’re young, all the more reason to begin planning early. Since rates of return on investments are anything but predictable, investing earlier is more likely to pay off in the long run.

Another important thing to remember is to update your plan regularly. Once per year, around tax season, reflect on the retirement checklist and spreadsheet that you made. Are you making progress toward your goals? Is your income trending upwards or downwards? You may find that if you keep retirement on the forefront of your thoughts that you make more informed spending and saving decisions.

 

Tagged with:
 

Comments are closed.

Set your Twitter account name in your settings to use the TwitterBar Section.