According to Gallup’s 2017 survey on Americans’ financial worries, 54 percent of those surveyed said they were concerned about not having enough money for retirement. That number is down from the 64 percent who were concerned about retirement in 2016. However, it’s still a large enough figure to make retirement America’s No. 1 financial concern.1
Much of the stress surrounding retirement comes from the unknown. There are many variables and factors in retirement that are impossible to predict. You can’t know how long you will live or how long your retirement might last. You can’t know in advance what kind of health issues you may face. And it’s impossible to predict how economic factors could impact your retirement.
However, you can create a detailed retirement plan to prepare for all these possibilities and much more. A written retirement plan will help you identify possible threats and implement strategies to minimize the risk. The more detailed your plan is, the less uncertainty and worry you may experience.
How do you create a detailed retirement plan? One effective approach is to ask yourself some important questions about your dream retirement. Below are three questions to help you better understand your retirement goals, needs and risks so you can create a detailed plan:
What do I want to do in retirement?
You can’t plan a road trip without first deciding on a destination. The same is true of your retirement. Before you can develop a strategy and road map, you have to decide where you want to end up.
Think about your ideal retirement and how you want to spend those years. It may be helpful to write down your ideas. Perhaps even write about what your perfect day in retirement might look like.
Do you plan to travel or live part of the year in another location? Do you want to pursue a favorite hobby, like golf or gardening? Do you want to simply relax and spend time with family? Write down everything that comes to mind, and don’t worry about cost or other limitations at this point. Simply focus on brainstorming what you actually want to experience in retirement.
How much will it cost?
After you’ve documented your goals and dreams for retirement, it’s time to start estimating the cost of your ideal lifestyle. Create a projected budget that breaks down expenses into specific categories. Some costs, like housing, utilities and debt payments, will be fixed. Others, such as travel and dining out, may be discretionary.
You may not know the exact costs you’ll face in retirement, but you can probably make a fairly educated estimate on most items. Be sure to include out-of-pocket medical costs, as Medicare likely won’t cover every form of care and treatment. Also, don’t forget about inflation. Your costs in all areas will likely increase as you get older.
What is most important?
After you create your retirement wish list and estimate your cost of living, you may find that there’s not enough money available for everything. If that’s the case, you may need to re-examine your goals and make some decisions about which are most important.
For example, you could look at your travel goals and find areas to cut back. Perhaps you could downsize to a smaller, more affordable home and take advantage of lower costs for things like utilities, maintenance, insurance and more. You may even consider pushing back your retirement age, which would eliminate some retirement years that you would need to fund with savings.
Ready to develop your detailed retirement plan? Let’s talk about it. Contact us today at Benefit Resource Partners. We can help you ask the right questions and implement a retirement planning strategy. Let’s connect soon and start the conversation.
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