Retirement is something that you look forward to for many years. However, some people find that it takes them by surprise. The reality of retirement is not what they expected, and they find that they don’t know what to do with themselves.
Retirement planning means financial planning, obviously, but it should also involve an element of what you intend to do with your golden years. The more you prepare for retirement ahead of time, the more ready you will be when it arrives.
- Set Goals for Yourself
What would you do if you had unlimited free time? Would you take a trip around the world, plant a garden, spend more time with your children and grandchildren, or start up a new business venture? While unlimited free time may seem like a fantasy now, in retirement it becomes a reality. All of these options and more, from the simple to the grandiose, are possible during retirement, but only if you have the ability to fund them.
Retirement planning, therefore, cannot separate what you want to do with how much money you want to have. The two go hand in hand. You need to decide what you want to do in retirement before you can figure out how much you need to save to achieve your goals.
- Take Stock of Your Assets
You may have retirement income coming in from multiple sources, such as ERISA bonds for your pension, personal savings, and Social Security. Knowing where your money is coming from helps you to be more organized and avoid coming up short in both the short term and the long term.
- Leave Your Savings Alone
When personal or financial difficulties arise, it can be tempting to tap into that retirement savings account. Resist the temptation at all costs. If you withdraw from your retirement accounts early, not only does that mean that you won’t have the money available when you need it, but it also means that you’ll have to pay tax penalties that you can probably ill afford. Regard your retirement savings as out of reach and leave them alone until you can withdraw them without penalty.
- Don’t Forget About Estate Planning
Retirement planning mostly focuses on the positive, thinking about what you want to do when you are no longer working. However, you shouldn’t avoid thinking about the bad things that could happen and planning ahead for those as well. You should decide who inherits property and benefits from things like life insurance policies and trusts, then create estate planning documents that make your wishes known.