Are you ready for retirement?

As we approach late adulthood, many of us avoid thinking about the future. However, retirement takes many years of preparation in order to ensure that you and your loved ones remain financially stable into your golden years.  It’s never too early to start thinking about retirement!  According to Charles Schwab, the majority of Americans between the ages of 55-70 confidently estimate that they have adequately prepared for their post-work years. However, many people who are as little as 5 years away from retirement have not yet begun to implement a plan. Overconfidence on this topic can be detrimental to a happy and healthy retirement.

If you haven’t started planning, don’t get discouraged. It is never too late to jump start a plan for your future! The goal is to set aside the right percentage of funds so that you can live as comfortably as you do now on a smaller income. However, with old age comes declining health and a bucket list that may include some expensive stops along the way. Here are a few points to help you set up a plan that will work for you:

Consider healthcare costs. Unfortunately with age comes a physical and cognitive decline. This is something imperative for people to think about when forming a retirement plan. Healthcare needs can be unpredictable regardless of how healthy a lifestyle you live. The possibilty of moving into a nursing facility after retirement is not farfetched, and definitely not cheap.

Examine current resources. In order to maintain a stable quality of life in retirement, you’ll need annual income equivalent to at least 80% of your pre-retirement income. With so many ‘baby boomers’ approaching retirement, government resources will be divided among the aging population more than ever before. Some who plan to retire know that they will have to have at least a part time job to support themselves, but for others that is not an ideal option. It is important to rely only on yourself to provide the funds for an enjoyable retirement.

Prepare for the lifestyle.   When most people dream about retirement, they may picture themselves attending the nearby country club, or embarking on a  European adventure. In order to fulfill those dreams, you must allot that money early on. Other simple lifestyle factors may also dwindle your funds unexpectedly, such as eating out more and spoiling grandchildren. The considerations for retirement go deeper than simply providing a roof over your head and food on the table.  Part of adequately preparing for retirement means understanding your spending habits and accurately budgeting for how much income you’ll need.  If you don’t have a retirement plan in place, it’s time to prepare now.

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