No matter how exciting the idea of retirement sounds, it doesn’t really feel good to spend years with limited cash. Several retirees feel start feeling the pinch within a year of retirement. They realize that their lifestyles cannot continue as before. They have to make significant changes to the way they live. This is not all, they now have to make more provisions for medical care too.
That doesn’t sound like a happy retirement, does it?
You will have to ask yourself some tough and practical questions if you want to live in retirement happily. They will help you plan better. Even if you are a recent graduate and have just started working, you need to think about retirement. Here are all the right questions for retirement.
How much do you make today?
What is your income? What are you able to retain post taxes? Is it enough to fund your current lifestyle?
Asking these questions will help you understand your retirement lifestyle better. Your ability to save and invest depends on your earning. If you are barely making ends meet, you have to either increase your income or drastically reduce your expenses to be able to save something.
What are your major life goals?
Everybody has some major life goals that demand hundreds or even thousands of dollars. Some people may want to live in a big house while some others want to spend on a dream holiday. If you have such goals too, start saving for them today. You won’t be able to fulfill all these goals when you retire. Make sure that you save for them only after you have set aside some money for retirement.
If you are younger, your goals could include a house, a fancy wedding and an exotic holiday. Note that retirement is also a big life event and saving for it is equally necessary.
When do you plan to retire?
The median retirement age is 62 years in the US. This doesn’t mean that you cannot keep working post 62. After all, adding 1 to 3 years to your working life could add a significant amount of money to your retirement fund. While many individuals decide to keep working in the traditional 9 to 5 setting, many others choose to skill up and join the gig economy.
You could continue working part-time or provide consultations to people in your respective industry. You could even start your own small business (don’t do it on impulse. Have sufficient funds ready for it without disturbing your retirement savings).
What will be your medical expenses?
Though this is not a common question, it is always addressed by smart retirees. If you have any pre-existing conditions like diabetes, your medical expenses could be higher than others. Get a complete health checkup, find out your current yearly medical expenses and decide the kind of expenses you could be making when you retire. Also check how much of these expenses can be handled by social security/Medicaid payments.
When you start answering these questions, you will get a clearer picture of your retirement. Good luck!