Thinking about retirement may seem overwhelming considering the time and effort needed to create the best possible plan, but keep in mind that these steps are essential if you want to reach the retirement life that you’ve been dreaming of.
Here are four steps to take to make you retirement-ready!
Step 1: Concentrate on the present
It’s normal to feel a wee bit queasy when thinking about retiring. It does, after all, feel final. In fact, according to a survey by the Employment Benefit Research Institute, only 23% of the working population feels financially secure about their retirement, and only 42% even bothered computing how much they will need in order to retire. So sure – it’s completely normal to feel lost if you’re not properly informed. It is so much you need to know about this new phase in your life that we’ll all eventually get into and the best thing to do is learn as much as you can about it as you approach it. Do your homework and look at your options. What else can you do right now? To help you prepare, plot your plan first and put the retirement lifestyle that you envision into writing. Next, take the essential steps to put these points into practice and keep tracking your progress.
Step 2: Safeguard yourself and your family
Now that you’ve changed your mindset from overthinking the future to looking at what you can do now, it’s time to think ahead. Predict the things that you might not be able to live without, and at the same time, predict certain hurdles that you can altogether avoid. Start by categorizing these into three aspects: your life, your health, and your assets.
Get life insurance that will cover enough for your needs. Talk to an advisor to make sure you get the type that is perfectly suited to you and your priorities. Assess the policy that you have annually to make sure it is still relevant to you. Things may change and you may need to modify your policy as well.
Just like your life insurance, health insurance will come in very handy during retirement. Think of the possibilities of a disability or staying at a home. We wish for the best at all times, but this will really hurt your pocket and make your situation worse for you if it comes and you’re unprepared. Healthcare will eat up a lot of your budget as a retiree so make sure you give ample provisions for it.
Assets or investments are also something to think about that will safeguard you financially later on. These include various investment allocations that you may make to ensure you have income both right now and when you retire. Really think about how you’re going to keep the cash coming when the time comes.
Step 3: Evaluate all possible saving options
Part of implementing your retirement plan is saving enough money for your dreams. Saving for your retirement is always a good idea, so go ahead and explore all possible options in doing this so as to maximize eventual gain. Study the different plans and look at how these will suit you. It’s good to have many options so you can arrive at the best possible solution. Three accounts that you can consider are Employer-sponsored retirement plans like the 401(k) plan, IRAs, and HSAs.
Step 4: Aspire for Financial Wellness
The state of our overall financial health, called financial wellness, is related to being ready for retirement. Now that you’ve jumpstarted your way to a successful retirement, it’s time to embody good financial practices and behaviors that will help you not only manage your finances well, but also improve your sense of finance and use of money. Some ways to do this are looking for ways to receive higher income, lessening your spending, avoid extra expenses and charges, consolidate loans, and looking for methods to pay less tax. This isn’t something that will happen in just a snap of your fingers, but rather something you should keep practicing constantly until you get to your actual retirement. Keep doing these four steps and surely, you’ll be on your way to retirement success!
Based on materials from The Balance
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Mike Cohen