Years of getting up early and driving to work, years of talking to clients, selling goods or services — you’re now nearing retirement! Even though you may have been looking forward to these years for a long time, there’s still plenty to do to make sure that everything is in order. After retirement, you won’t have a steady paycheck to rely on, and all of a sudden you’ll have whole days to do whatever you want! So before you close the door on your working years, here are some quick retirement planning tips to make sure you’re ready.
Create a Budget
Everyone has those moments of dreaming about living on a yacht and having your choice of sports car, but is that really realistic? The challenging part of planning for retirement is the uncertainty of how long you will be around, what will happen in the future that you need to start planning for now? To create a budget, first think about your current lifestyle and how much you’re spending now on your mortgage, food, entertainment, vacations, etc. Certain things about your finances will change, so start making a list to learn how you will budget your income after you retire.
The truth is that people are living longer these days, meaning you might have to stretch the savings you have at retirement. Financial advisers have said that if you use 4 percent of your savings each year, that it should last through your life. But be sure to break down that 4 percent into a yearly amount, and then you can take that amount and create a budget with it. For example, if you’ve saved $400,000, whether through an IRA or a 401(k), 4 percent would be $16,000 a year. That’s probably not enough to buy your dream yacht. Take a realistic look at your savings, as well as any other stream of income, and determine if you have enough to retire on.
This is often a part of retirement planning that gets overlooked. You may not be spending much on doctor or hospital visits or medication right now, but that may change in the next 10-30 years. According to HealthView Services, the lifetime healthcare costs for a healthy 65-year-old couple will be around $365,000. Also take into consideration if you want to save for long-term health care or an assisted living facility. These are expensive services, but your comfort and happiness may be worth it. You just have to plan and save for it.
Time and Hobbies
Another surprise that retired couples face is not knowing what to do with their time. Having all the time in the world sounds great, until you get two months in and you’ve realized you don’t like painting, there’s still nothing on TV, and it turns out that you actually don’t want to play golf 24/7. Take some time now to decide how to structure your days, what goals you want to achieve, or if you want to volunteer or take a class. This isn’t a huge financial part of retirement planning, but it could save you money on photography classes, a stamp collection, or a motorcycle you’re too nervous to drive.
Do you need professional, reliable, and trusted retirement planning advice and guidance? Contact the team at Resolved Financial Solutions and start planning a happy, successful retirement.