How to Plan For Retirement
Do you know what you should be doing to plan for your retirement? After a long life of working hard, you’ve finally hit retirement age. This is a fantastic time to reflect on all the wonderful things you’ve done throughout your occupational journey, and start to focus on enjoying some recreation in your twilight years.
You’ll either move into living off your savings for the rest of your life, receiving a lump-sum payment or payment plan from your superannuation fund, or receiving a government pension depending on what you are eligible for. To make the most of your money, a bit of planning is in order so you can make sure your retirement is a comfortable one.
Work out what it is you want from your retirement
You’ve suddenly got a lot of free time on your hands, and many seniors use this opportunity to take up hobbies they’ve always wanted to try or to participate in more activities. Deciding what you’d like to do recreation wise and researching the ongoing costs of taking up the activity is the first step towards a comfortable retirement.
Perhaps you’ve always wanted to build model trains. If this is the case, you’ll need to factor in the cost of the materials, the new parts, and the ongoing supplies like glue. Deciding how much you’ll want to put towards this hobby each week will help you stay on track and discourage overspending.
To help you establish a retirement budget, a retirement calculator is a helpful tool in finding out how much money you’ll be entitled to each week while managing your savings effectively.
Maybe instead you’d like to save for a bigger goal, such as an overseas trip. Working out the cost of the vacation, including accommodation, meals, tips, and entertainment, will give you a figure to start saving towards. You’ll be able to factor in savings each week or month towards your vacation while maintaining your budget and still living within your means.
There is also a great chance that you’ve made smart real estate investments, or perhaps you’ve avoided divorce, which can cost you during a home sale. Either way, if you’ve invested in real estate during retirement, you can expect to earn money either through an eventual sale, if needed, or a rental opportunity for passive retirement income. But outside of that, let’s get into the details about preparing for some unexpected retirement issues.
Preparing for the unexpected in your retirement years
Life is full of twists and turns, so it’s only smart to prepare for the unexpected. Writing out a retirement budget, creating a rainy day fund, and making sure your insurance policies are up to date are all great ways to make sure that when an unexpected expense comes up, you won’t be drowning in debt.
Making sure your insurance payments are on time and up to date is like having a savings fund that is managed for you. If you’re the sort of person who dips into their savings quite a bit, insurance funds will guarantee the repayments you make can’t be touched until you need them most.
It’s easy to forget that unfortunate events can (and will) happen, particularly when your life is running along comfortably. A death in the family or sudden health issues can cost thousands of dollars in payments, particularly if you don’t have private health or life insurance.
When these costs pop up, and you don’t have a contingency plan in place, you could be facing bankruptcy or even homelessness in extreme cases. Preparing for the future now guarantees these worst-case scenarios won’t happen, and it’s always better to be safe than sorry. Furthermore, using guides and resources, like this rent report from ABODO, for example, to help understand living expenses in your area, can be extremely helpful.
Making sure your savings are on track during retirement
Not all superannuation, IRA, 401Ks or retirement funds are created equally, and it’s a good idea to do some research on the fund you’re currently with, or make arrangements to pay into an account that more aligns with your goals.
Many people don’t realize that throughout their careers, they may have had several different superannuation companies that your employers will have been paying into. Consolidating these into a single account ensures you know the exact figures you’re working with for your retirement.
You may be wondering if it’s better to save into a personal bank account over a super fund, and there are both pros and cons to each of these options. When saving into a personal bank account, it can be easy to dip into your savings whenever you like, leading to overspending.
Some super funds charge a monthly or yearly fee you may not have been aware of, and your retirement money could be depleted quicker than you’d like. Finding a super or retirement option that fits your needs is, therefore, an essential part of making your future comfortable. Don’t be afraid to ring around and find something that suits your goals.
Learning how to keep yourself financially stable during retirement
In preparing for a comfortable retirement, it might mean working harder now so you can enjoy the benefits later. Paying into a life insurance policy, having a rainy day fund, and sticking to your retirement budget are the best ways of making sure your future is financially covered, even when the unexpected happens.
Preparation is critical, and your senior years should be spent enjoying the fruits of your labor. With a little planning and organizing, such as using a retirement calculator or consolidating your superannuation into one fund, you’ll be set up for retirement success.
Overall, saving for retirement is a huge piece of life for many of us. Whether you make it a point to gather real estate investments to provide income during retirement or earn enough to live without money coming in during retirement, either way, you’re in a good position. In fact, it’s likely many people will truly be envious of your retirement opportunities.
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Use these additional resources to help make the right decisions when buying or selling a home.
About the author: The above article on what to do for a comfortable retirement was written by Sam Radbil. Sam is an author at ABODO Apartments, an online apartment marketplace that helps renters find apartments all across the country. ABODO reports on rent rates, the changing of real estate markets and trends within the real estate industry.