How Much Thought Have You Put Into Retirement?

Someone asked me about planning for retirement recently, and it got me thinking. Yes, you can be proactive.

You can go to an insurance agency and buy a package early in life.
Or you can start setting money aside and making investments in preparation for the golden years.

But before you do all that, you must decide and understand what you want retirement to look like.
It's important to know where you want to go to better plan how to get there.
Remember, there isn't a one-size-fits-all approach, so figuring out your situation before purchasing a package is vital.

You don't want to be sitting on your deathbed, regretting your choices because of failure to plan.

Here are some simple things you should consider before choosing a retirement package.

Step one: Determine age

At what age would you like to retire? 30? 50? 60? 70?

How long do you expect to live based on your lifestyle and the morality rate of people around you?

Be honest with yourself. Are you living a healthy life now? Do you have a chronic disease? Do you take care of your body?

These factors also play a significant role in determining life expectancy, so don't take them lightly.

Let's say you hope to retire at 60 and decide to live into your 90s, so it looks like you will be retired for 30 years.

This assumption means you must have 30 years of expenses in your retirement plan or assets that can sustain you.

Step two: Determine Your Quality of Life

What quality of life do you expect to have in your retirement years? Do you wish to be able to lie on a hammock reading a book on your verandah?

Or do you see yourself going on exciting adventures around the world?
The price tag for both is very different. Be honest and as specific as possible.

Do you own your home, or are you renting?

How much money will you need to sustain the lifestyle for a month? A year? The 30 years you plan on being alive?

Now that you are clear on the sum, account for inflation.

Remember that $100 today will buy you more than $100 in the future.

How much more do you think it will?

After these steps, You should better understand the money you will need to live during retirement.

Step 3: Account for Other Plans

Do you already qualify for a retirement plan with the company you are working with? How much of your future expenses do you imagine that covers?

If you are sure about the sum you will receive, reduce it from future expenses.

You should have a clearer picture of the money you need to sustain the quality of life you wish to have during your retirement years.

Step 4. Determine Your Approach

Now that you know where you are going, finding the right approach should be a breeze.

Based on your current and planned retirement age, working with an agent to determine which plan is right for you should be more accessible than before.

Remember that there may be some hiccups along the way, but by creating a plan, you can be more confident when life throws you a curve ball.

The challenge
This week, take some time to brainstorm and understand what retirement looks like to you.

Making a plan is the first step in taking control of your later years. Don't just let it knock on your door and find you unprepared.