One of the most challenging steps in any process is getting started. Preparing for retirement is no different. In order to have a financially fit retirement, you must take some time to “dream big” about your retirement goals, create a retirement spending plan, and determine the appropriate savings rate to meet these goals.
To get started, set aside an hour to write down all of the important things you want to do in retirement. Do you want to spend more time with your children and/or grandchildren? Have you always dreamed of traveling to a foreign country? Does golfing, swimming, and gardening for a majority of your time sound relaxing? Or, would you prefer to spend your time and resources helping those in need?
Whatever your dream, it will cost money. So, when planning for retirement, be sure to take the cost into consideration. To do so, you can use an online calculator such as this one at bankrate.com. The calculator should help you get a sense of the amount you may need to save, but do not rely solely on this tool for your personal budgeting needs.
Then, analyze your expected retirement income. Consider sources such as your pension, Social Security, supplemental retirement accounts (such as a 457, 401, or 403(b)), Traditional and/or Roth Individual Retirement Accounts and personal savings (such as bank accounts).
If your dreams will cost more than your expected retirement income, get busy! If you are still employed, you may have the opportunity to save more money on a pre-tax and/or after-tax basis via your retirement plan. Check with your benefits representative to explore your options.
Once you leave employment, you can consider taking a part-time job to boost your retirement income. Alternatively, you may want to speak with a CERTIFIED FINANCIAL PLANNER™ professional to discuss the feasibility of obtaining a reverse mortgage or possibly taking other actions which may be appropriate to meet your retirement income needs.
It only takes an hour (and sometimes less) to get started, so start dreaming today!
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