(Financially) Planning Your Ideal Retirement
Everyone has a different idea of what retirement could look like, from the age they decide to retire to the lifestyle changes they make after leaving a job. Finances also play a significant role in retirement planning as you transition from supporting yourself with full- or part-time wages to using savings to provide for expenses. If you need help preparing for your ideal retirement, an advisor from HSC Wealth Advisors can work with you to set your retirement goals.
Costs to Consider During Financial Planning for Retirement
Financial planning begins by considering what you want the future to look like and the necessities you may need as you age. Here are a few essential costs to consider in your financial plan:
- Medical care: Medicare covers some medical expenses, but you may need to use savings to pay for the rest. As you age, your medical costs may increase.
- Family support: Some retirees use their savings to support children or grandchildren. When retiring, you must consider whether you have the ability or desire to provide financially for others.
- Long-term care insurance: This insurance method gives policyholders a daily amount to assist with activities of daily living, such as bathing, dressing, and eating. The premiums may change in cost depending on your health condition but can help reduce the drain on assets.
- Spouse predeceases you: If your spouse predeceases you or needs significant medical care, your financial situation may change, impacting your retirement plans.
- Lifestyle changes: Whether you plan to vacation more or move to a new state once you retire, these changes will affect your spending during retirement.
Your Retirement Financial Planning Checklist
Planning for retirement begins long before you retire. You can prepare for retirement yourself or get help from a financial advisor. Here are a few pre-retirement planning tasks to check off your list as you consider your retirement:
- Set a financial goal: Given growing life expectancies, you should plan for about 25-30 years of retirement. Financial planners often recommend saving 25 times your annual expenses or around $1 million before you retire.
- Start saving: Start thinking about saving long before you retire. Retirement savings options include a 401(k) or a traditional IRA. You might also increase the amount you set aside from your yearly earnings or find alternative ways to make money, like a side business.
- Pay off debts: Try to eliminate debts before you retire so that you can focus on health insurance, travel, or other expenses during retirement.
- Apply for government benefits: Apply for these benefits before you retire — if accepted, you will need to wait a few months before you start receiving payments.
- Keep investing: You can still earn significant returns if you keep investing throughout your retirement years.
- Consider your insurance: Insurance requirements change as you age. Particular insurance coverage may be less necessary, while other coverage, like health insurance, becomes more critical.
Financially Prepare for Retirement
Your ideal retirement begins with a solid financial plan to help you face unexpected costs or changes as you start a new lifestyle. Our financial planners at HSC Wealth Advisors can help you manage your financial planning, assisting you in living the retired life you desire. Get in touch with an advisor today to start your retirement planning.
