Whether you are nearing retirement age or just planning for your future, there is a lot to consider before you make the decision to retire. Unfortunately, many people fall short in retirement planning and find themselves in unexpected situations without adequate resources to meet their needs. Before you decide to retire, here are some things to carefully consider.
What You Need to Consider Before Retirement
Retirement will be a major transition into a brand-new chapter of your life. Visualize what you want your retirement years to look like. Think about things that you want to do in retirement. Travel? Take up a new hobby or pursue an old one? Will you stop working altogether? Start part-time work? Begin a new business or investment venture? These are all big considerations that you should have specific answers to before you decide to retire. You’ll want to have the funds to do what you want to do.
Living off savings and withdrawals from retirement accounts can be stressful without a clear budget. How much you will need in retirement greatly depends on your lifestyle choices. What fixed costs will you have? Good planning requires an honest assessment of whether your actual savings can meet your anticipated expenses. Planning for contingencies is also critical. What happens if your portfolio investments do not do as well as you planned? How unpredictable are your anticipated investment returns? What cutbacks are you able to make should the financial markets go south? There are many “what ifs” to consider. What if you live longer than you expected? What if you are faced with an unforeseen illness or some other serious health crisis?
Creating a realistic budget based on your life expectancy is likewise critical. Make sure your budget contains a sufficient cushion to cover sudden expenses. A cushion is as critical as accounting for all of your regular expenses. Many people who have meticulously saved and planned for retirement find their plans upended when faced with unexpected costs or volatility in the financial markets.
If you are planning for retirement, save as much as you can and work for as long as you can. A study conducted by the Stanford Longevity Center revealed that three months of additional work generates the same increase in retirement income as saving an additional one percent of earnings for 30 years. This is both an astonishing and invaluable finding. Consider working a little bit longer and find ways that you can make that happen. Make your work more sustainable. Take vacations if needed. Plan for regular time off. Is there a less demanding role for you at work? These are things that may allow you to work longer in a less painful way.
Estate Planning Attorney
In addition to the financial aspects of retirement, you will want to make sure that your legal house is in order before you retire. What arrangements have you made for your long-term care? Planning for illness or incapacity is crucial to ensure that your retirement plan will work for you in these situations. E.A. Goodman Law can assist you with your options to ensure that your legal house is in order to take advantage of available Medicaid and other elder law opportunities. Planning for the future can be challenging but it does not have to be done in isolation. E. A. Goodman Law can assist you in developing an elder law plan to secure a better future for yourself and your loved ones. Contact us today.
Posted in: Elder Law, Retirement Planning