How to Plan for a Comfortable Retirement

It’s a well-known fact that we’re living longer and longer, which means you should all be doing as much as possible to prepare for old age. Have you started thinking about your retirement yet or are you just hoping it will all fall into place? Would you like to be able to maintain your current standard of living? Are you planning to travel the world? Have you thought about how you’re going to cover the cost of unexpected expenses? Whatever your background, you’re going to want to be comfortable in your retirement. You also want to be able to enjoy life as much as possible. With these two goals in mind, here are some helpful tips.

What Do You Envisage for Your Retirement?

Before you start worrying about how you can save for your retirement, you need to think about what you want after you take your last drive to work. What do you think you’ll be doing? Where will you live? What lifestyle will you enjoy? What are you going to do with all your spare time? If you can visualize your dream retirement, it will be easier to work towards that goal.

How Much Are You Going to Need?

Once you’ve decided what you want to be doing in your retirement, you need to calculate how much it’s going to cost. There are numerous resources online that will help with the calculations. The actual figure will depend on where you see yourself in a few years time. Will you be relocating, so you are close to family, or are you considering moving overseas? Many of the expenses you can expect to pay can be forecast with a certain amount of accuracy.

What Do You Need to Save Every Month?

Now you’ve calculated how much it will take to meet your needs in retirement; it’s easier to work out how much you need to save each month. The earlier you start saving, the easier it will be to meet your target. Here’s an example of how that could work. Imagine you can save $100 every month starting when you are 25. By the time you reach retirement age, your savings could potentially reach almost $200,000. If you don’t start saving until you are 45, your savings will drop by almost three quarters.

Are You Prepared to Make Risky Investments?

When you’re planning on making investments for your retirement, you need to think about the level of risk you’re prepared to tolerate. This is because it will determine the type of investment you choose. For example, will you keep everything in a savings account at a local bank or would you prefer to learn how to invest in stock market?

Start Saving Money as Soon as Possible

Any retirement plan requires a certain amount of saving. As well as that you also need to adjust your spending habits and live within your means. Being more frugal with your spending now will mean you’ve got more money to cover your day to day expenses when you retire. A few cutbacks now will give you more flexibility when you need it later on in life.

Plan for Inflation  

For many retired people, meeting the cost of inflation can be a big worry. Life expectancies are steadily increasing which means the need to cover the cost of inflation in retirement is vital. Any investment choices you make need to be able to keep your savings in line with inflation. As you all know, it tends to go up and down like a yo-yo. Ideally, you’d prefer to be in a position where your finances can cover any increases.   

What About Taxes?

Unfortunately, you can’t avoid paying taxes. Not if you want to avoid spending your retirement behind bars because you forgot about them! If you’ve got a retirement account, it is likely it is tax-deferred. It means you’ll pay tax on any withdrawals you make. Property and state taxes may also have to be paid. A good financial advisor will be able to give you the latest tax information.

Are There Going to be Social Security Benefits in the Future?

Figures suggest that Social Security reserves are running out. It has been projected that they will run out in the very near future. With the reserves gone, you’ll be left to your own devices when it comes to providing an income. It is no longer viable to rely on a state pension when the time comes. There are many different ways you can save for the future. Start saving as soon as possible is the most obvious, and there are several wise investments you can make. It’s always better to be safe when it comes to your future, and plan for the unexpected as best you can.   

Find a Financial Advisor

While it is possible to plan and save for your future without any professional help, choosing a financial planner to work with will make it more likely you’ll meet your goals.

There are a number of benefits worth mentioning. A professional advisor will be able to help you develop a holistic approach to your finances. They will be able to give you advice on the right investments to make. As well as that, they will help you develop a savings plan and encourage the important discipline. Discuss your goals with a financial advisor, and they’ll be able to help you with making a plan.

A financial advisor will have gone through specialized training and be very knowledgeable about the different types of investments you can make. Provide them with all the information they ask for, and they’ll find the most appropriate savings plan for you. It doesn’t matter if retirement is just around the corner or several decades away, the suggestions they make will be based on market conditions and your current circumstances.

Ask any investors who already use the services of a financial advisor and the most important benefit will be the peace of mind a professional provides. You will find yourself far less anxious about the decisions you have to make. They will be on hand to answer questions and put your mind at rest when you have concerns.

With the proper planning and discipline, you’ll have no problem achieving a comfortable and memorable retirement. Whatever your dreams are, whether they include traveling the world, leaving a legacy for future generations, supporting charities or kicking back and enjoying life, the right savings strategy will ensure your dreams come true. There is no guarantee attached to the tips we’ve mentioned, but they will most definitely change the likelihood of everything working out. You’ll be much closer to maintaining your current standard of living, long after your last day at work.       

Posted in: Retirement