What Needs to be on Your Pre-Retirement Financial Checklist
Looking forward to retirement is something millions of Americans do every day, but unfortunately many of them don’t have a Retirement Plan in place to ensure that it’s enjoyable and fulfilling. If you have done very little planning to prepare you and your family for the Financial Security you need for retirement, now is a good time to start.
Look at what you want to do in retirement
You’ve likely spent time dreaming with your spouse, significant other or other family members about what your ideal Retirement Lifestyle would look like. Now you need to take the steps to see that those dreams can at least partially come true. It isn’t foolish to fantasize about the things you’d like to do or the places you’d like to see. It instead is a good place to begin setting up a Retirement Plan.
Once you have an idea of how you’d like to spend your time once you’ve retired, it’s time assess your financial ability to realize those dreams. If your analysis shows that financially you can achieve your retirement goals, then you can move on to the next step in your planning. If, however, the funds you expect to see once you retire don’t match your goals, you’ll need to make some changes. You might want to scale back your plans somewhat, or you might decide to extend your working years a bit so that you can save more money to finance your Retirement Lifestyle.
Plan to live a long time
Statistics show that today people 65 years old are likely to live another 20 years. It’s not out of the question that your lifespan could reach 30 more years. So you’ll need to look at what you must have available to live on for two to three decades. Working past your official retirement age is one option. You’ll also want to think about where you’ll want to live and the impact that will have on your living expenses.
Later retirement years often see expenses rise as medical costs go up. Research shows that a couple that retires at age 65 can expect to pay nearly a quarter of a million dollars in medical expenses before they die. Since government medical programs won’t cover all your expenses, you’ll need to plan to have the money available.
Start saving for retirement
Most financial experts recommend that you start putting money aside for retirement as soon as you begin working once you’ve completed your education. However, many young people either don’t think about that or can’t save very much because of current expenses. If you’re in your later working years with little or no Savings, you can still retire, but you’ll have to save robustly. It’s also likely you’ll need to scale back retirement plans. There are a number of retirement planning guides online that can help you determine how much you should be saving monthly to reach your retirement goals.
Invest retirement savings wisely
Putting money into a Savings account for retirement is a wise plan, but it’s even better if you make an effort to invest your money. There are a number of different ways you can put your money to work both before and after you retire. Bonds are a popular type of investment due of their safety. However, a diversified investment strategy is a good idea. A mix of annuities, bonds and even some stocks can give you the long term returns you need to enjoy your retirement years with as much Financial Security as possible.
David Milberg is an investment analyst from NYC.