Define Your Retirement
You probably have some idea of how you’d like to spend retirement. Here’s where you write your objectives down, listing the most important goals first. For now, don’t focus on budget. Focus on ideas, and be as specific as you can.
Estimate your life expectancy
Although it may be unpleasant to think about, calculating your life expectancy is necessary to figure out how many years of retirement you will have to save for. According to the SSA, the average American male can expect to live to around age 84, while women can expect to reach 87. However, one in four (for both genders) will live past 90 and about ten percent will live to 95. Consider your own lifestyle choices and family history to make an assessment of how long you can expect to live.
There a many places on the web to estimate your life expectancy. Below a couple:
Take Stock of Your ‘Assets’
Evaluate Your Health — Now
To get the most out of your retirement — and life in general — you want to be as healthy as possible. And while few of us enjoy doctors’ visits, a little preventive medical attention can go a long way.
Determine When to Collect Social Security
Wouldn’t it be nice if you saved and invested enough to enjoy financial freedom during retirement? Perhaps you did but for many that’s not reality. Most of us will need the Social Security benefit we’ll receive — both to pay for basic essentials and to support our retirement dreams. The age at which you choose to start collecting Social Security will have a direct impact on how much you’ll get in monthly benefits.
Network Through Social Media and Other Methods
You need to build and maintain your network even in retirement. Use networking opportunities to showcase your talents. It’s OK to brag about yourself to those who might help you fulfill your retirement dreams.
Decide How Much You Want (or Need) to Work
This is the classic cost-benefit equation: Unless you are financially set for life, you will have to either stretch limited money and give up some retirement dreams or stay in the workforce (in some capacity) to help pay for those dreams. As you write down your retirement goals, take into consideration how much work is necessary.
Create a Retirement Budget
Your budget needs to include:
How much money is coming in.
How much it will cost to reach the goals you identified
How much debt you have.
Find New Ways to Cut Your Expenses (Start Saving More)
Your retirement may be right around the corner or years away. Regardless, saving more now will always make you better prepared. That doesn’t mean all of your extra cash has to go into savings, but now is the time to find new way to cut your expenses. Start by listing your bills and then figure out ways to trim them.
Prepare for the Unexpected
Few of us head into retirement expecting the worst. But sometimes it happens. Prepare for the unexpected now and you won’t get caught off guard later. Taking time to consider how you’d pay for — and respond to — everything from minor issues like a roof leak to serious ones like a grave illness will help you weather those storms when they come. Discuss the big issues with your family or those closest to you. How much would it cost to make major repairs? What would you want to do (or what care would you want) if there was an illness in the family?
Stick to Your Plan
This step may be challenging but it’s definitely rewarding: sticking to your plan. We humans are creatures of habit and it’s common to revert to old habits after trying a new course. The important thing is to stick to your plan over the years until retirement, when it will all be worth it.