People are living longer than ever which means that retirement planning is more important than it’s ever been. We also know that retirement planning can seem overwhelming, stressful, and is often something people procrastinate on because it’s not easy to find all of the answers. To live a better retirement, there are a few steps that you can take in order to simplify the process and get the answers that you’re looking for.
- Know what you want your retirement to “look like”. What is your perfect vision? Sitting at home with your nearest family and friends while you enjoy spending time with them? Going on elaborate trips with your spouse or partner? Simply having enough money to cover your basic needs while you downsize your home? No two people are alike when it comes to what their retirement looks like, but the first step to a better retirement is developing this vision.
- Know what your cash flow is or will be at and during retirement. Yes, no one can plan for retirement perfectly as a lot of unexpected things can happen. However, you can get a good handle on what your cash flow needs will be by determining what your general expenses will be. How much money will you need for everyday expenses such as food, utilities and a roof over your head? How much money will you need for health, travel, a vehicle, and so on?
- In line with what your vision looks like, now that it’s established, how much money will be needed to support that lifestyle? If you plan on downsizing your home, you may have money leftover from the sale of your property, which you can also use for living expenses. But if you plan on travelling the world and having expenses cars, your lifestyle and cash needs are going to be different.
- Determine where and who your assets are going to go to when you pass on. Estate planning is essential and should be included in retirement planning. But again, everyone has different needs. One person may want to make sure there’s enough money left over to help out their children or grandchildren, while another person may not have the need to have money or property left over to pass on.
Now that you know the 4 steps listed above, you can use them to help plan for a better retirement. In addition, it’s imperative to seek out the advice of a qualified financial planner who has experience helping people reach their retirement goals.