Regardless of how young you are, it is never too early to begin thinking about your retirement. Estimating your expenses now will help to put you in the position to reach all of your long-term financial goals. You do not want to reach the retirement age only to realize that your dreams of relaxing on the beach with no worries will not come to fruition. Here are four key factors to consider as you begin the retirement planning process:
What Are Your Anticipated Medical Expenses?
While nobody can predict their future health, having a good grasp on what your anticipated medical expenses will be as you head into retirement will help you get a better handle on your financial needs. You will also need to determine what your long-term insurance needs will be and adjust your budget accordingly.
Where Do You Want to Live?
Whether your plan is to stay with the family home or ship off to Los Cabos, you should start to plan for your ideal retirement now so you can start working toward that goal. Be sure to factor in travel back and forth to visit family members if you plan on retiring somewhere different than where you loved ones live.
How Much Do You Want to Travel?
One of the biggest benefits of living the retired life is having the freedom to come and go as you please without being tied to a schedule. If one of your retirement goals is to be able to travel the world, you will need to make sure that your finances are able to meet this desire. If you are a homebody and do not plan on traveling much after retirement, you will not need as much monthly income.
How Will Your Expenses Change?
Many new retirees find that their expenses drop significantly after they leave the workforce. Some examples of decreased costs come from the elimination of commute expenses, lunches out during the workday, and not needing to purchase business clothing any longer. On the flip side, many retirees find that they are spending more on entertainment costs such as gym memberships and golf course fees because they have more free time on their hands.
By going into retirement with a solid plan and a detailed budget, you can allow yourself to dream big and reach all of your financial goals. Don’t wait until it is too late to get this plan in place. Interested in more retirement and finance articles? The Idaho Falls Spokesperson has more where that came from: