Retirement can be overwhelming, but it gets easier if you go through it in small steps. Retirement isn’t about getting out of work — it’s about making the life you want. For that, you require a strategy that includes savings, medical and lifestyle needs. The more you know, the better off you’ll be when you reach retirement age. Here’s a quick guide to make sure you have the retirement you want, so when the time comes you’ll be comfortable.
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Picture Your Ideal Retirement Life
Consider what retirement will look like for you. Do you want to travel, spend time with your family, or start new hobbies? Write down specific details. The more you know, the more you can arrange. Once you’ve decided what you want to do, you’ll know what you’re going to need.
Calculate How Much You’ll Need
Calculate your monthly living expenses. Include groceries, rent, bills, hobbies, etc. Also, plan for emergency situations or medical expenses. Use retirement calculators to determine how much to save. That’s the step that gives you something to aim towards.
Set Up a Savings Plan
Try to save regularly. Ideally you should save 15% of your salary if you can. Automate deposits to make saving easier. Your savings has more time to mature if you start early, but it’s never too late. Contributions get increased over time too.
Choose the Right Retirement Accounts
Each retirement plan is slightly different. You’ll often get an employer match on a 401(k) which increases savings more quickly. IRAs are tax-free and Roth IRAs can be withdrawn tax-free at retirement. Ask a financial professional if you’re not sure. Choose accounts strategically and watch your money multiply.
Pay Off Debts
Debt eats up your retirement nest egg. Don’t start with high-interest debts such as credit cards. Mortgages and car payments are next. Being debt-free in retirement equals more independence. Getting debt cleared up quickly can also make you feel secure.
Plan for Health Costs
In retirement, healthcare is a big part of your budget. The older you are, the more often you will have to visit the doctor or get new medication. Check into Medicare and other supplements that may be available. Don’t forget long-term care insurance in case you will need it in the future. Save early with health savings accounts (HSAs).
Have a Plan Of Where You’d Like to Live
Your house can take up the bulk of your retirement account. Living in a huge house is too expensive – Downsizing would be cheaper. Moving to a cheaper region will stretch your funds as well. Look into which community/climate you would like to live in. After all, your locality affects both your economic well being and living standards.
Look Into Social Security Benefits
Social Security helps in retirement but it’s not going to fix everything. You can start taking it at 62, but waiting until full retirement age gives you more monthly income. Go to your statement online and see how much you’ll get. When your benefits come, you can make the most of them.
Consider Part-Time Work
Some retirees still continue to work part-time to keep active and make extra cash. It might be something you like doing, such as consulting or teaching. It doesn’t have to be full time – it can be part time. When you make even a small amount of money you can make retirement easier.
Make Constant Checks and Updates to Your Plan
Nothing in life stays the same – neither should your pension plan. Do a check each year on savings, plans and unexpected bills. If your budget or dreams change, adjust your plan. Checking in with your plan keeps you on course and helps to make corrections when needed.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information.