Do you actually have enough money to retire? How much is it going to cost? What are those costs predicted to do in the future? What steps do you have to take now to protect what you own and to plan for this future, which can shift and change on its own, depending on how long you have until you retire?
These are all important questions to ask. If you haven’t gone through them yet, don’t panic. You do have time, and there are plenty of options at your disposal. But you also don’t want to put this off or just assume that you’ll be able to retire at a certain age. It gets more expensive every year, and you need to make sure that you’re ready.
4 steps to start with
Retirement planning can include a lot of different steps, but here are four basic things you need to begin with:
- Considering potential expenses: If you plan to stay in your home, you need to consider things like utilities, maintenance, and property taxes, even if you’ve already paid off your mortgage. But there could be a lot of other expenses, such as the cost of living in a nursing home or paying for medications needed as you age.
- Identifying your income sources: Ideally, you won’t simply have no income after you retire. Perhaps you have investments and you plan to live off of the money you make. Perhaps you have money saved in a retirement plan that you can use. Maybe you have a pension from your work. You need to take stock of all of these income sources and compare them to the potential expenses noted above.
- Setting up a savings plan: Even if you think you have enough money to retire, it’s wise to get a savings plan in order. This is doubly important if you’re unsure if you have enough. Keep in mind that retirement can be much more expensive than the daily costs you face now, at a younger age. Your costs may just go up as you run into health complications and other necessities that come along with aging, and you need a plan that will make sure you are ready.
- Thinking about your assets: Another goal that you may have is to retain the assets that you already own. You don’t want to have to sell the family home, for instance, just so that you can live in a nursing home. You’d rather be able to keep the family home and pass it on to your heirs. You need to think about how you can set up your financial plan so that you can retain the assets you want and liquidate the ones that you don’t.
Perhaps the best thing you can do is start this process as early as possible, so make sure you know exactly what options you have.