Now & Later
DON ’ T JUST PLAN FOR YOUR NEXT VACATION . PLAN FOR YOUR PERMANENT VACATION , TOO .
It doesn ’ t matter which report or study you review , the conclusion is always the same : People spend more time planning for their next vacation than planning for retirement . And why wouldn ’ t they ? Planning for a vacation is fun . Vacation conjures up images of traveling , relaxation , adventure and feelings of euphoria . Retirement planning , however , just feels a lot like work . And because retirement isn ’ t necessarily an immediate concern , it tends to be lower down on the list of priorities – always second to what ’ s happening in the “ here and now .”
Although people spend their entire lives working toward retirement , when the day finally comes , they unfortunately may realize their ideal retirement is significantly different from reality . This scenario could have turned out differently with a little more planning early on .
How Much Will It Cost To Retire ?
The first step toward planning for retirement is to simply imagine what your ideal retirement scenario looks like . Consider your answers to the following questions :
• Do you plan to travel ?
• Will you move to a smaller home or to be closer to family ?
• How often do you plan to eat out ?
• If you ’ re leaving the workforce , how will you fill your days ?
• What activities and hobbies do you plan to enjoy ?
• What will you do to maintain your health and , based on your lifestyle and genetic predisposition , what types of health concerns might come up in your later years ?
Your answers to these questions might be vague and they might even change as the years go on , but it ’ s important to consider every scenario . This will help you assess what resources you ’ ll need to accommodate your desired retirement lifestyle .
Beyond The Finances
When you hear people talk about retirement planning , the focus is often solely financial . Yes , your financial situation is paramount to the retirement planning process , but it ’ s really only part of the equation . In fact , I ’ ve found that retirement planning is most successful when we take a holistic approach .
It ’ s important that all of your advisors ( financial , legal , insurance , investment , medical ) are on the same page . They need to be aware of your retirement plan and should understand how each piece fits into your overall strategy . And be sure to consider how decisions in one area can impact the others .
When To Get Started
While there ’ s not a universal rule or age threshold for when you should begin planning for retirement , the moment you begin allocating financial resources toward retirement ( i . e . enroll in your company ’ s retirement plan ) is also the moment the retirement planning process begins . While this may seem early , remember that the closer you actually get to retirement , the harder it is to make necessary financial adjustments if you find out that you ’ re actually not on track to achieve your anticipated retirement lifestyle .
As with most things , the most difficult part of retirement planning is getting started . However , once you ’ ve adopted a retirement planning mindset , you can begin to approach this exercise holistically . Our lives are in a constant state of change and these changes , along with changes from external forces , are likely to impact your overall retirement planning strategy . Therefore , be sure to review your plan annually to ensure that you ’ re still on track to reach your goal .
YES , YOUR FINANCIAL
SITUATION IS PARAMOUNT TO THE RETIREMENT PLANNING PROCESS ,
BUT IT ’ S REALLY ONLY PART OF
THE EQUATION .
10