Age is Just a Number: Retirement Can Be Filled With Adventure

When you hear the word “retirement,” what image pops up in your mind? Is it a tropical vacation somewhere? Is it a golf course with friends? Or is it relaxing with your grandkids? Whatever it is, let’s hope it’s a happy image. Because, retirement should be just happy, healthy and wealthy. For this, you don’t have to worry about your age as age is just a number. It’s always fun to daydream about what your adventure might be, right? When you no longer have to work, what will you do to fill your days? Will you move to a coastal community and stroll at the beach? Perhaps you would prefer to move to another country? Once you finish your daydream, the reality of planning for a financially secure and healthy retirement sets in.

Let’s get started…

You know how important it is to plan for your retirement. Your first step should be to estimate how much income you’ll need to fund your retirement. Your retirement income needs will depend on your lifestyle and many other factors that can and probably will change over time.

But we have to start somewhere and using your current income is a good place to begin. Using your current income as a starting point and reducing it by an estimated percentage to take into account the assumption that some of your expenses will no longer be incurred and some will change significantly, such as health insurance, payroll taxes, transportation expenses can make sense. As you might imagine, the risk in using this general approach is that it doesn’t account for your specific situation. If you intend to maintain a lifestyle that is very consistent with your current lifestyle it is fine to use a percentage of your current income as a benchmark, but if you anticipate changes in your lifestyle it is highly recommended that you take the time to go through all of your current expenses in detail and make reasonable changes to reflect how you expect those expenses will change over time as you enjoy your retirement.

Your goal should be to ensure that your income during retirement should be adequate to cover your expenses. After all, that’s why estimating those expenses is a big piece of the retirement planning puzzle.

To determine your retirement needs you also need to estimate your age of retirement and the number of years that can follow it. The length of your retirement will depend upon when you plan to retire and your life expectancy. Determining when you will retire is an important decision which will be driven by your career, personal goals, health and financial situation.

Now that you have developed an idea of your retirement income needs, your next step is to review your sources of income to determine how well prepared you are to meet those needs. During your earning years, make sure your investment decisions are well thought of. Remember, every penny saved is a penny earned. So, you should consider investing in long-term instruments.

Now is the time when you need to make savvy investment decisions during your working life and put your hard-earned money to work for you in the future. Stop thinking! Start planning and implementing right now for your golden years! Don’t wait for the right time to come!