Making Sense of Retirement Planning
Jump Start Your Retirement Plan
In the early stages of planning, think about the long days of retirement. It’s great to imagine having all those extra hours to do the things you’ve always wanted to do, yet some people feel lost without their working day connections.
“My estimation is that retirement planning should be about looking ahead financially as well as socially,” says Jan Cullinane, co-author of The New Retirement: The Ultimate Guide to the Rest of Your Life. “What are you going to do? Are you really the type of person that is defined by your job? How will you replace the social contacts you have through your job? You should really start thinking about all that and making lists so you can better prepare for it all.”
Another issue to consider is where you want to live after retirement. A home near work will no longer be an issue. And your current home, if it’s an “empty nest,” may be too large and too expensive to maintain. If you think you want to move, start researching the options sooner rather than later, especially if you are nearing retirement age. This decision can have a big impact on both your future finances and your quality of life.
To figure out your retirement cost-of-living, experts suggest you should anticipate needing about 70% of what you currently live on to get by when you reach retirement age. The reason for that drop is that you won’t be commuting or going to as many work events. You’ll generally scale back commitments as you age. Some advisors do caution that you should think about your goals thoroughly, so that you have enough money to do whatever you desire. You may want to travel or maintain club memberships, which can be just as costly if not more than they are now.