Saving Advice - Some people can’t wait to retire and do whatever they want, whether hanging out at the beach all day, or babysitting grandkids, or volunteering. They look forward to deciding what to do with the day without outside obligations. Others never want to retire because they enjoy their work or think they’ll get bored in retirement. Whatever your retirement focus is, know that one day, you’ll likely join the throngs of the retired, whether that’s by choice or because health issues sideline you.
4 Things You Should Focus on When Planning Your Retirement
Planning for decades of retirement requires careful thought. Ideally, you’ll begin planning in your twenties or thirties, but now is an excellent time to start if you’re older.
When Do You Want to Retire? The first question to ask is when you want to retire. If you’re 25 and want to retire at 45, your retirement planning is different than if you want to retire at 65. Determining when you want to retire and how long you have until then is the first step to successful retirement planning.
What You Want to Do in Retirement? What kind of retirement do you envision? Are you a homebody who plans to work in the garden and stay local most of the time? Or do you want to travel the world and take the trips you never could because you were always working?
Remember that most people spend more in retirement in the first few years, but as they age, they spend less.
The lifestyle you want to live in retirement and how many years you have until retirement will help you determine how much you need to save.
Will You Invest or Let a Financial Planner Invest for You? Do you plan to educate yourself and do all your retirement investing, or do you plan to hire a financial planner?
My grandpa learned to invest and managed his portfolio. He managed to save enough that he and my grandma lived through 25 years of retirement together, and then my grandma lived an additional five years. They had money left over to give as an inheritance when they both passed.
However, there is nothing wrong with using a financial planner if you don’t feel comfortable investing yourself. One caveat: if you use a financial planner, ensure that they’re a fiduciary. That means they’ll invest to benefit you, not themselves through fees and poor investment vehicles.
How Will You Catch Up If You Start Late? If you’re starting retirement late, determine a plan to play catch up. You can save more or work longer, or a combination of both.
My other grandfather worked until 75 because he had a meager retirement. He only had to finance ten years of retirement before he passed away. This scenario isn’t for everyone. Some people don’t want to work into their seventies. If that’s true for you, you’ll need to find a way to save more for retirement to make up for the years you weren’t able to save when you were younger.
Final Thoughts
Not all of us have a retirement focus. If you do, you’re ahead of many others regarding retirement planning. If you don’t, you still have time to catch up. Either way, the time is now for retirement planning.