Most people dream of the day they can retire, but many do not move beyond dreaming to planning. Retirement planning can be done at any age, but experts recommend starting as early as possible. It can seem like a daunting endeavor and fall to the back burner as day-to-day obligations take precedent, but answering a few simple questions can help you take the first steps. In celebration of Retirement Security Week, September 21-27, 2018, let’s take a look at those important questions.
What does your ideal retirement picture look like?
Start jotting down your ideas and, if married, your spouse’s ideas for retirement. Maybe travel is in your plan. If not travel, then how do you plan to spend your time? Will you want to downsize your home? Many people find that the home where they raised their family is more than they wish to maintain. Will you continue working? If so, how much do you wish to work? Part-time or contract work can allow more flexibility while still providing a source of extra income.
What assets do you have?
Look not just at your bank account and retirement accounts, but also at property or businesses you own. Other assets to consider are collections that have significant financial value. Take stock of other investments that may be used to fund your retirement. At some point in this process, it may be wise to discuss your financial picture with a qualified financial planner or advisor as well as a legal expert familiar with public benefits. Why both? The financial professional can evaluate the assets you own and help you consider new products that can maximize your retirement savings and income. Before you purchase any new products, the legal professional can help you think about which financial products will set you up for successful future benefits applications if you and/or your spouse need help paying for long-term care.
How is your health now? What health changes might you expect over time?
Personal health is a significant factor in retirement planning. The first step is to make sure you are up to date on all of your health screenings and check-ups. Next, consider your family history. Does it include major diagnoses like cancer, heart disease, or dementia? Have you made lifestyle changes in light of that history? Once you have taken stock of your health, you can better assess your plans for retirement. Health affects finances and quality of life as you age. Now may be the time to change your lifestyle in ways that will maximize the quality and duration of your life. It’s also a good time to realistically consider potential long-term care needs. Most people need some form of health care assistance as they age, be that in their own home or in a residential facility. The further ahead you plan for these possibilities, the more options you’ll likely have if and when the time comes.
When should you take social security?
There is no easy answer to this question, and it is really a case-by-case decision that an attorney or financial professional can help you make. In the most basic terms, waiting longer to take benefits will increase the monthly benefits you receive. However, for many, this is not an option. It is important to assess your expenses and make the most informed decision possible with help from experienced professionals.
How can I cut expenses to save more?
This is an excellent question for people of any age to consider, but it becomes increasingly important as you age and after you are on a fixed income. Minimizing expenses can provide for extra savings to include in your retirement plan and can help when creating a budget for retirement. If you can scale back in some categories (for example, holiday gifting, eating out, or frequency of trading for newer model cars), then you can reallocate to other categories in order to afford a more comfortable lifestyle in the future. Paying off debt also becomes more manageable when you reduce other expenses.
How do I need to plan for the unexpected?
Retirement planning can feel like a gamble. There is never any guarantee that the retirement you plan becomes your reality. Many unexpected events can and will arise, and they can put a financial strain on your family. It is therefore important to talk with your family about contingency planning for these events. What will happen if your health suddenly changes or you are in an accident? If the right legal documents are already in place, you already have a financial contingency plan, and you have communicated with your family to get them on the same page, you have the best chances of riding out the storm with minimal stress to yourself and others. The retirement picture may not be exactly as you imagined it, but you may still come reasonably close if you’ve accounted for unexpected changes.
Considering these questions can help you to begin working on a retirement plan that will fit your needs in the future. Your retirement destination is easier to reach when the roadmap is clear and you have a plan that accounts for bumps in the road. To begin thinking about your long-term plan, get in touch with a qualified elder law attorney. One that specializes in Life Care Planning will be especially well-equipped to advise you about how long-term care impacts your retirement planning. He or she can also connect you with a reliable financial planner or advisor to ensure that you make the most of your financial and care plans.