After asking a number of individuals about their ideal retirement, I received a wide array of interesting and sometimes startling responses. Some look forward to more leisure time and the opportunity to travel with loved ones. Others don’t see retirement as a reason to slow down but rather to focus on new endeavors and adventures. Regardless of what your ideal retirement might look like or how far off it may be, here are some steps that anyone can take to prepare for their next chapter:
- Make retirement planning a top priority. Any plan is better than no plan at all, and putting off or ignoring how you’ll fund the golden years could be the worst option. Saving for retirement should be a fixture in your budget and not easily dismissed in favor of other demands or wants.
- Take part in your employer’s retirement plan, and if there is a match to your contribution, aim to contribute at least the amount eligible for the match. If your employer does not offer a plan, there are several different types of individual retirement accounts (IRAs) to choose from.
Consider a series of possible outcomes and use a range of estimates for the variables that will impact your retirement plan. Spending, volatility of investment returns, taxes and inflation are all factors that will impact how well your goals are funded. Even if you knew how long you would live and how much you would spend, it still would be extremely difficult, if not impossible, to estimate your retirement liability exactly. Make reasonable estimates and review the analysis annually.
- Seek the counsel of others. It’s often helpful if an impartial voice can provide guidance on emotional topics such as selling the family home, or buying a second property. A qualified wealth advisor can help map out a plan that takes into account numerous variables and random results to determine the probability of meeting your objectives. Working with a professional may help you avoid mistakes and improve your chances of living out your ideal retirement.
When your retirement arrives, you can take a deep breath and exhale. You made it! Of course that doesn’t mean you can completely relax. You will still need to stick to a budget and make important decisions, like when to optimally file for Social Security. However, you don’t have to shoulder these responsibilities alone, and with proper planning along the way, the chances of living your ideal retirement can be greatly improved.