This is the big question almost every person asks their financial advisor, though it may take the form of “How Far Behind am I in Saving for Retirement?” We all would love a clear-cut answer to our financial uncertainties, but that answer can only be arrived at through the examination of a variety of lifestyle factors. This answer is never etched in stone. It constantly morphs over time, and requires you to be vigilant in keeping a close eye on your finances. The key is dissecting the issues at play and examining how they relate to you. Here are the main issues that are paramount for you to consider:
- What kind of retirement lifestyle do you want?
- Where do you want to live?
- Where do you want to travel?
- How do you want to enjoy yourself/time with family and friends?
- What assets will you have?
- What debts will you have?
- What income streams will you have?
- When do you want to retire?
- Based on your current health, genetics and community, might you live to 90, 95 or 100?
- How much savings will you need to live your ideal lifestyle throughout those years?
- What expectations do you and your trusted financial advisor have for health care, cost-of-living, interest rates, and other economic factors?
Take time to answer all of these questions thoughtfully and thoroughly. Then you can build a plan and a budget to make it work. You have many options, but “winging it” is not one of them. Things will change, so you need to review your implementation plan annually and make appropriate alterations. Remember: the benefits of careful financial planning are worth all the effort. The goal is to empower and enable yourself to spend your golden years exactly how you want. Getting organized and planning for all possible situations will give you actionable strategies for making the most of each year of retirement, no matter what road blocks you encounter along the way. That peace of mind is invaluable.
As you age from 60 to 100+, you will be going through many changes. Think of them as phases or segments that come with changes in interests, health, finances, relationship status, and other factors. With regards to health insurance, for example, the costs of health and elder care increase as health deteriorates. Only by reviewing your answers to such questions regularly, with the input of trusted advisors, peers and experts can you truly take charge of your life and enjoy the retirement of your dreams!