[VIDEO] Simple Steps You Can Take Now to Prepare for Retirement

It’s never too early or too late to start planning for retirement. When you think about it, the main goal of retirement planning is to help take the guesswork out of managing your money, so you can truly understand the big picture and make more informed decisions. Imagine how you’ll feel knowing you’ve not only taken the necessary steps to evaluate your finances, but have also employed strategies that enhance your retirement over the long haul. As you can imagine, it takes a lot of careful planning for your money to last a lifetime. Here are my simple action steps you can take today to start preparing for your golden years:

Assess your current situation. One of the first steps is to gather the key pieces of information that are needed to analyze your individual situation.When you start planning for Anything financial, you should take inventory of your current financial situation. Examine your assets, and think about your current income and expenses today, then ask yourself if it’s going to be the same in retirement? Also, look at your investments and savings. Do you have sufficient funds to last in retirement and maintain your current lifestyle, no matter how long retirement is? If you’re not sure, you may want to run some projections, or sit down with a financial advisor and have them run for you.

Envision your ideal retirement. Can you clearly articulate the retirement you’ve always dreamed of? What does it look like? What are you doing? Where are you doing it? Retirement planning isn’t just about the money – It’s also about the things money can’t buy. It’s important to define your priorities and where you want to be in 5, 10 and 20 years. Also, every decision you make can impact your bottom line and the money available to you in retirement. For this reason, before you focus on savings, one of the first things to do is to outline your ideal retirement and ask yourself…how do I want to retire?

Crunch the numbers. Now that you have a clearer picture of how you want to spend your retirement, you’ll want to estimate how much it will take to support it. Controlling your financial affairs requires a thorough understanding of your monthly cash flow. Budgeting and tracking your expenses can give you a strong sense of where your money goes every month, and can help you reach your financial goals. Some expenses may increase in retirement, while others may decrease. There are many questions about your retirement that need to be answered to get a handle on what your expenses will be in the future. Make sure you compare all sources of income, such as a pension, Social Security, rental income, and investment income, with your projected expenses in retirement, and make sure you add a cushion for unexpected expenses that may pop up. If you want some assistance on how to get started examining your monthly budget, download our free monthly expenses worksheet at braviasfinancial.com/worksheet.

Plan on a long life. Do you realize you could spend as many years in retirement as you did during your working years? According to the Society of Actuaries, in 2018 the life expectancy for a 65-year-old man was 85.8 years and for a 65-year-old woman was 87.8 years. Obviously this is very promising. However, generally speaking, people aren’t adequately prepared for a long retirement, and without proper planning, can easily outlive the money they’ve saved. In the good old days, planning for retirement was pretty simple, because people didn’t live much past retirement. You worked for 30 years, got a company pension, and put your money in the bank or invested it in savings bonds to make it last. Back in the day life expectancies were short, and on average people spent less than a decade in retirement. Planning was relatively easy. In today’s world, retirement planning is considerably different and more important than ever. The fact is, people are living longer today than at any time in history, and with medical advances in healthcare and science, this longevity trend should only gather momentum.

Get a health checkup. When was the last time you saw your doctor? As you get older, your health may become more of a concern to you and it may become one of your largest expenses in retirement, especially because of longevity. If you’re still currently working, you employer may be paying the majority of your health insurance premiums. But what happens when they no longer do? The basic dilemma of normal retirement is that you’re not typically covered by an employer plan, but you’re usually too young for Medicare to kick in. This will leave you on your own to cover this important expense, so I recommend you go see all of your doctors before you retire.

Funding your dream retirement lifestyle requires careful planning. On top of that, you need to take certain financial steps to ensure you enjoy a comfortable and worry-free retirement. Thinking about these aspects should help give you a better understanding of what you’ll need, how you’ll live, and more importantly, how to plan for it. Not sure where to start? Give us a call any time and we’ll help you get on the right track to retirement.