No matter how old you are now, this is the perfect time to think about your retirement if you’ve never done so. Even if you already have a retirement plan, it won’t hurt to keep reviewing it once in a while.
Maybe you are just from college, and you’ve just landed a new job. You may have a lot going in your mind – supporting your family, developing your career, going for further studies, starting a side business, etc. With all these in your mind, retirement will never cross your mind until it’s too late.
There is no better time to plan your retirement than when you still have a lot of energy. Here are five things you need to think about when planning for your retirement.
How Much Do You Have Saved Already?
Saving isn’t only meant for expanding a business or for emergencies; you also need to save for your retirement. If you have retirement accounts from 401(k) or any IRAs, check what you have in those accounts, including any investment account.
You might be surprised that you have very little in those accounts. If that’s the case, consider increasing your retirement contributions. You have to remember that, in your retirement, you will not have a source of income unless you work on it now.
What Do You Want to Do Once You Retire?
If you are leading an active lifestyle with many things to do every day, what you do in retirement will matter a lot. Sitting at home doing nothing should be the last thing on your mind. Plan how you’ll spend your time in retirement.
Will you move to a new home? Volunteer? Travel? Or just spend quality time with your family? Think about what can make you happy in retirement and plan for it. Nothing comes for free.
You can use online retirement tools or calculators to help you work out the amount you’ll need to support you. This will also guide you on what you need to start saving today.
How Long Will You Work Before Retirement?
Hopefully, you still have several years before your retirement. If not, you may have to think hard about your life post-employment. Look at your savings. Are they enough to offer you a comfortable life in retirement?
What about the amount you have in your retirement accounts? How far can they take you? If you don’t have enough savings, you’ve to do everything possible to boost the savings. You can talk to your employer to increase your retirement savings, and, if possible, set up a parallel account to save for your retirement.
What Will Be Your Source of Income?
Of course, you can’t depend entirely on your savings for survival after retirement. Plan how you’ll continue earning some cash, even if it’s just a small amount.
It would not help much to depend on Social Security or tax-advantaged accounts in your retirement. Think of something that can bring you some income apart from these sources. You can think of starting a business. Build some rental units or start a company that is in line with your area of specialization.
If you already have a running business, the better. But even so, you’ll need someone to help you run it. You’ll also need legal experts to take care of your business interests, properties, etc Consider looking for a law firm in your area to find such experts. For instance, if you live in California you might search for a Sacramento law firm.
How Will You Take care of Your Health?
As you age, you’ll start facing many health challenges. You don’t want to be a burden to your family. That’s why you have to think about how you’ll pay for healthcare.
The best way around this is to contribute to a Health Savings Account. And the earlier you start saving, the better. You can also start thinking about how you’ll pay for long-term care, just in case you grow to an advanced age that requires you to live in a unique facility for the elderly.
Let not your mind be clouded with the much you are earning now and the so many projects you have lined up. Your retirement should be given the priority that it deserves. The better you plan and take care of it, the less a burden you’ll be to your family. Planning well is also the only way you’ll assure yourself of a comfortable life in retirement.