Retirement may seem a long way off, but you must start planning for your later years as early as possible. Proper planning will ensure that you are financially comfortable in retirement and able to enjoy your golden years to the fullest. With this in mind, here are some useful tips on how to prepare for retirement.
Make a retirement plan
Many people feel unsure how to plan for their retirement and uncertain about how much they should be putting away each month towards their retirement. According to a survey by the Employee Benefit Research Institute, only 27 percent of workers feel very confident that they will have enough money to cover their basic expenses during retirement. The same survey found that just 15 percent of workers feel confident that they have enough money saved to cover potential medical expenses during retirement. Creating a retirement plan will help you take control of your savings and feel more confident as you approach retirement age. If you need help writing a retirement plan, then you should contact a financial advisor who will be able to provide you with expert advice and guidance. Many employers also offer retirement planning services and financial advice to help you plan for your future.
Create a retirement savings goal
You should start by determining how much money you will need to ensure a comfortable and secure retirement. Most experts recommend that this should be approximately 70 percent of your annual pre-retirement income. However, the amount will depend on your lifestyle, health, and preferences when you retire. You can use an online retirement calculator to help you work out how much money you will need during your golden years. Once you have a rough figure in mind, you will need to review your retirement income sources. This may include social security, retirement accounts, inheritance, stocks, and savings. Finally, you must calculate how much you will need to save each month in order to reach your retirement goal. You can use a retirement calculator or speak with a financial advisor to get advice on this.
Boost your retirement income
Once you have a retirement plan and retirement savings goal in place, you must stick with it and avoid overspending. It may be tempting to spend your savings on luxuries instead of putting it into a retirement account. However, you must always try to stick with your savings plan, or you risk being left in a poor financial position in your later years. You should also look for any opportunities to boost your savings as you approach retirement. For instance, you may choose to invest in stocks and shares as a way to improve your finances. If you decide to invest any money, then be sure to do your research and make smart investments that are likely to give you a good return. Equity release can be another way to improve your savings by releasing tax-free cash from your home without the need to move. Experts at Keyadvice.co.uk explain how “Equity release is an increasingly popular way for people in, or approaching, retirement to boost their ﬁnances.”
Prepare emotionally for retirement
Along with your finances, it’s also important to consider how you are going to stay fit, active, and social once you retire. Many people feel unsure about what to do with their spare time once they retire, and large numbers of elderly people experience feelings of loneliness or isolation. For that reason, you should prepare emotionally for retirement and find hobbies and activities to keep you active once you are no longer working. Some popular activities for older people include water aerobics, bowls, badminton, golf, or walking. Maintaining an active lifestyle will help you stay in good health and minimize your risk of developing medical issues.
Many community centers put on activities and events designed to help seniors socialize and remain active. Volunteering can be another excellent way to keep busy after retirement and give something back to society. Volunteering your time can also be a great way to meet new people and gain a sense of purpose. Many organizations are in desperate need of volunteers, such as animal shelters, schools, criminal justice centers, and care homes.
Planning for your retirement may seem like a very daunting and time-consuming task. However, early retirement planning will allow you to reach your financial goals and ensure that you can maintain the lifestyle you want in your later years. Use the above tips to help you reach your retirement goals and start working towards a successful retirement today.