Looking ahead at your retirement?
Planning for the next phase of your life is about more than just crunching numbers. Your financial plan for retirement should be built around your goals and values, setting you up to live your best life after you retire from the workforce.
From preventing retirement burnout to making a financial plan for your later years, we’ve got your guide to getting started.
Life Planning Considerations
Deciding the best time to retire into the next phase of your life depends on more than just the amount in your savings account—you also need to consider what kind of life you want to have once you jump into this new chapter.
What are you trying to do?
A great place to start is to consider what’s most important to you. When you’re not working the 9-5, what do you want to be doing with your time? Many people enter retirement excited at the prospect of all the possibilities, only to quickly grow bored. In fact, nearly 1 in 10 retirees are bitten by the boredom bug after only five months off the job, and one-third consider applying for a part-time gig just to pass the time.
So how do you defy the statistics?
The answer seems obvious: a meaningful retirement begins with your passions.
If you didn’t have to work, what would you do?
When making the leap into retirement, ask yourself what you would want to do if you never had to work again.
For some, a job is a meaningful way to give back to their community, further their knowledge, or simply feel a sense of accomplishment each day. Just because you retire doesn’t mean you have to necessarily stop working. If your passions include your job, you can explore the possibility of continuing to work your role, even if in a part-time position.
If you like the idea of working but want to explore something new, you can also consider jumping into a new career. Maybe it’s those dreams that always took a backseat in your life, that you’ll now have the time and resources to pursue. Don’t be afraid to start over in your retirement.
If the idea of work doesn’t appeal to you, you might want to consider other ways to fulfill your passions. This could mean volunteering at a local non-profit, or traveling to someplace you’ve always wanted to see. Maybe you could take classes at a local college or university. Dare to dream big—what do you want most?
Now that you know what you want your retirement to look like, you can create a plan to make it happen.
Retirement planning isn’t a one-step process—and the sooner you get started, the better. Turning those dreams into reality begins with a financial plan, but how do you know where to begin? We want you to know that the technicalities and processes involved in creating a financial life plan might not be as complicated as you think.
What’s the minimum income you need for retirement?
You’ll want to decide a target age for your retirement. Although the standard age lies around 65, you have options to shorten or extend that number as you see fit.
Once you have an estimate of how many years your retirement will last, you need to figure out your monthly fixed expenses. There are many factors, and change happens, so a financial advisor can help you calculate this number, account for inflation, and adjust it as necessary.
While retiring younger may seem tempting, you’ll need a considerably higher nest egg to make your savings stretch the extra time. When you’re calculating how much money you’ll need for this next phase of your life, don’t forget to account for inflation, any debts, social security, pensions, and any other income or costs you can foresee heading your way down the road.
Although you may be planning on receiving a family inheritance at some point, we recommend you don’t factor this into your financial planning.
What if you want to do more than the minimum?
You know how much you need for survival, but what about the fun stuff? Consider the lifestyle you’ll want to have in your retirement, like where you’ll want to live. How much extra cash do you need to have to do everything you want to?
This is also a good time to ask the tougher questions. Consider how your family factors into when you can retire. Do you want to live closer to any grandchildren that might need your help being raised? Do you need to have easy access to travel there if you’re needed?
In the event that you need assisted living, would you rather live in a facility or move in with family? These are things you’ll need to talk through with your family members, well before you ever get to that stage. The answers to these questions will help guide you in your goals and discover when you can retire.
Gain Clarity in your financial planning
Whatever phase you’re in in the retirement planning process, we’re can help you to prepare for your financial future. Schedule a meeting with Clarity Wealth Development to get started today.