Planning for retirement starts when you’re young.
From the moment you enter the workforce and start earning money, you need to start saving that money, investing it wisely, making use of tax-advantaged accounts, and doing everything else that you can to build up a healthy retirement nest egg. For years, now, you’ve been doing that — and now retirement is looming.
Unfortunately, many of us face retirement without enough in the bank to protect us. And even those of us who do retire with a nice chunk of savings may have trouble knowing how to make that money last, or what other financial, health-related, and personal concerns we might need to account for as we move forward into retirement.
Below, we’ll explore some of the major issues that you’ll have to think about in retirement.
1. Planning your budget
Saving and investing has given you a certain amount of money to retire on. Combined with smart investing going forward, that might just give you enough to live on throughout a long and comfortable retirement.
But make no mistake: It’s easy to blow through even the largest amounts of money.
That’s why your single most important personal finance concern moving forward is your retirement budget. You need to be careful not to use too much cash each month because you don’t want to outlive your money.
Furthermore, you need to make sure that you’re accounting for unexpected expenses. An emergency fund is critical, especially as you grow older and surprise medical bills become a bit more likely.
Work with a financial adviser to lock down the ideal retirement budget, and then stick to it.
2. Considering your future
When you first retire, you’ll likely be living in the same house that you’ve lived in for years.
Perhaps you want to stay there — and perhaps you don’t. Regardless of how you’re feeling right now, it’s crucial that you sit down and make a plan for your retirement living situation.
Now is the time to look at retirement communities and consider planned communities with individual homes, apartment-style living, assisted living, and other options.
The economics of the situation matter, so crunch those numbers and see what’s within your budget.
You should also plan for the possibility that your ideal living situation doesn’t work out. If your health suffers and you need full-time care, will you hire a live-in health care provider or head to an assisted living facility?
If it’s the latter, which community would you prefer to join? Make these plans ahead of time, because doing so later might be difficult. Cognitive decline is an unfortunate reality for most seniors, and mental and physical health issues can sneak up on you. Plan while you can, and you’ll enjoy a better retirement.
3. End-of-life planning
Retirement can be the best years of your life, in part because you will finally be free of many lifelong responsibilities. Still, you need to take care of just a few responsibilities — namely, the ones associated with your own passing.
Unless you’re planning on living forever, you’ll need the help of wills and estate lawyers to create or update your will. How can you maximize the inheritance your heirs will get? How can you make sure that your final wishes are respected? These are the questions a lawyer can answer.
You should also consider planning for your own services. You can buy funeral plots and caskets ahead of time, as well as prepay for services and cremation.
This can make things much easier on your loved ones when you die, and it will give you peace of mind as you enjoy your comfortable retirement for as long as you may live.