To have a comfortable, stress-free life while you’re retired, you need to maintain a nest egg that will fund your lifestyle for years to come. Whether you’re approaching retirement or already there, planning for the next steps in your golden years is a great financial strategy!
Here are five retirement planning tips and resources to help you stay financially secure in the future.
Set Retirement Goals
To get started, you should first set a personalized retirement plan. It’s important to build a strong financial structure by creating goals that fit your income. Before putting your retirement plan in writing, try asking yourself these questions:
- How long will my retirement savings last?
- How do I want to spend my time in retirement?
- How much money do I need every month to maintain my standard of living?
- How will I financially handle medical expenses or emergency funds moving forward?
Knowing these answers will not only help you determine how your money is spent but also where to invest it.
For additional information on retirement goals, use these helpful resources.
Create A Retirement Budget & Stick To It
Making a retirement budget isn’t just a one-time thing, it’s a lifelong process of maintaining healthy spending habits. That’s why it’s important to know the details of your ongoing expenses, and determine whether your total spending will go up, down each month.
Here are a few budget-friendly tips to help you save more with less.
- Plan out your monthly fixed and non-essential expenses
- Factor in non-recurring expenses and emergency funds
- Compare your total expenses to your retirement income
- Check your budget regularly to make sure you’re on target with your goal
Additionally, you might need to incur other costs, such as a new home and mortgage, your children’s college fund, or other out of pocket expenses. A good practice is to set mobile or online budget reminders with your bank to make sure you’re on track with quarterly spending.
Review Your Investments
Now that you’re retired, you’ll likely be receiving additional benefits from Social Security. And by age 70, you’ll have to start taking required minimum distributions from certain types of retirement accounts, including:
- Roth 401(k)
- Individual retirement account (IRA)
Reviewing your investments on a regular basis will ensure that they are providing desired returns and meeting the needs of your lifestyle. How you choose to distribute your assets across different investment accounts will impact your ability to meet your year-end retirement goals. With that in mind, you may need to shift from high-risk investments to those generating a steady rate of return (RoR).
Your reallocation could also depend on how old you were when you retired and your current health status. If you are age 55 or below, then you may choose to play the stock market more aggressively during your early retirement years.
If you haven’t reached your retirement savings goals or don’t want to deal with the daunting responsibilities of homeownership, then downsizing could be a smart financial move. With proper planning, you will be able to save money, eliminate the stress of homeownership and improve your overall quality of life.
Housing is one of the largest capital resources you have for achieving a secure retirement. And in most cases, your home is more valuable than your retirement savings. That said, you want to make sure that you have a retirement plan that allows you to frame a variety of downsizing options.
Plan For Long-Term Care
Apart from having regular health care plans in your retirement, you should also consider long-term care at some point. Based on studies from The Henry J. Kaiser Family Foundation, one in three people turning 65 will need nursing-home care at some point during their lifetime. Since Medicare does not cover retirement communities and nursing homes, you should think about applying for supplemental insurance plans or use Medicaid to fund outstanding costs.
Learn more about long-term care options by checking out these articles.
One of the most challenging things about creating your own retirement plan is striking a balance between expectation and reality. If you’re still unsure about investments and retirement planning, schedule a meeting with Senior Lifestyle and learn how we can help you prepare for financial goals.