You may be envisioning a future with a lot of what-ifs that further add to the uncertainty. While we cannot predict the future or control it entirely, a little planning can be very helpful. Taking care of a few aspects before you retire can give you a certain sense of control. It also helps ease your worry about what the future holds and enables you to be better prepared for it.
Assess what you have
Before anything else, it is important to inventory your assets. This way you can have a clear idea of what you have presently. To do this, you must make a list of aspects, including your income sources, your savings, and your insurance policy, if any. Also, add your assets to the list, including your stocks, property, jewelry, or any other such possession of significant monetary worth. You may also want to consider any outstanding debts for this list. When you deduct these debts from your assets, you will have a clear idea of where you stand from a financial perspective.
Think of how you want your retired life to look like
At this point, it may also be a good idea to reflect on how you want to live your retired life. Think of where you want to live, what kind of expenses you will have, and what you want to do when you are not actively working. The kind of lifestyle you want will be a huge factor in determining how much money you will require.
Lower your debts
In a perfect world, you may want to have a debt-free post-retirement life. However, to make that happen, you need to plan carefully and extensively. Consider your outstanding debts and if the amount is significantly higher, it means you have to work for another few years until you have accumulated enough or paid off a sufficient amount of debt. You can also refinance them with a more manageable income if possible. However, if that is not an option, consider paying it down to reduce the accumulation of interest. This will enable you to contribute more towards savings for the future.
Make a solid estate plan
Regardless of your current financial situation, it is important to make an estate plan as a part of your retirement planning. It helps you ensure your wealth is distributed according to your wishes or preferences. An estate plan should ideally include a power of attorney, a trust, and a will. The majority of individuals are not familiar with the intricacies of estate planning, given the multiple aspects you have to cater to. If you feel overwhelmed by the process, you can consider seeking professional help from a financial advisor in Goodyear, or where you live, to ensure that everything is in order.
Make an emergency fund
It is always a good idea to have something for a rainy day. It becomes even more important when you retire. You will, after all, be spending your savings even on unexpected expenses, which can include medical bills, house or car repairs, etc. That said, it is important to keep an emergency fund. You can even make a separate account for it where you can put aside a certain amount every month. The amount of money in your emergency fund would generally depend on how much you can easily put aside. However, experts recommend keeping an amount equivalent to at least three months of salary in your emergency fund as a sufficient safety net.
Consider your retirement income
Even if you are not planning to retire for many years, it is a good idea to start preparing for that phase of life at your earliest. Consider your income sources from where you will be getting money after you retire. These can include your current investments, pension fund, social security, etc. Also, consider your current expenses and the amount you spend on entertainment or other elements that cannot be categorized as essentials. Now think of how much time you have left till retirement and how much money you would like to have by that time.
Conclusion
Regardless of where you stand in your professional life or what kind of a retired life you aspire to have, the time to start retirement planning is now. It can be greatly beneficial to seek the help of a financial advisor who can help you see a realistic picture of your present circumstances. They will also assist you in making sound financial and investment planning decisions that can help you secure your future.
With the right mindset and approach toward financial matters and professional guidance by your side, you can successfully plan retirement and lead a comfortable life later.
