How to Create a Retirement Plan
It’s wonderful to see you exploring the road to retirement. While it may be tempting to put it off until later, “later” may not offer you enough time to make your goals reachable. Starting early gives you the best chance of growing your money and living out your sunset years just the way you wanted. So, are you ready to set yourself up for a great retirement? Let’s do this…
Determine what retirement looks like for you.
Finding out what retirement looks like needs to be the first thing you do, not the last. Sure, financing plays a crucial role in shaping your life after nine-to-five, but knowing what you want to do brings clarity to everything else.
You may envision spending the time tinkering in your workshop while your spouse pictures living with your eldest and enjoying more time with the grandkids. Having the “what would you like to do in retirement?” conversation early gives room for compromises like moving to a smaller house in Middletown which has space for a shed and is also closer to your adult child’s home.
If your dreams for retirement are still general and vague, that’s alright too. Start by writing a couple of ideas, putting your most important goals, like “learning ballroom dancing” or “volunteering with the kids,” at the top and move on to…
1. Set a retirement timeframe.
Once you determine what you’d like to do in retirement, the next step is to figure out when you want to hang up your hat. Your current age, as well as your expected retirement age, are the two pillars of an effective strategy for retiring. They help you decide how much you need to work to pay for your dreams. Don’t wait until the retirement age set by your place of work to make this decision, especially if you don’t have enough assets to support you in your sunset years.
You should also know: social security benefits are only paid in full to retirees who have reached the national retirement age. Individuals who claim after surpassing the age are eligible for delayed retirement credits, giving you an increase in benefits for the first few years. This leads us to our next point.
2. Evaluate your oral and overall health.
Now more than ever before, we spend more years of our life working, and while retirement frees up time, deteriorating health becomes the new barrier. That’s why it’s so important for over-55s to not only commit (or recommit) to exercising and eating healthy. Also important is evaluating your oral and overall health sooner rather than later.
Let your physician know when you plan to retire and come up with a plan to maintain or improve your health. If you live in Middletown and its surrounding areas, Dr. Lang can help you create a more proactive approach to your oral health. One which curbs the development of cavities and bleeding gums and identifies oral health issues early to prevent them from escalating into costly dental procedures 5 or 20 years down the road.
3. Research retirement saving options.
Employers may offer 401(k)s or 403(b)s to help you save up for retirement, but that’s not the only saving option available to you. HSA’s offer great benefits for medical expenses paid on an out-of-pocket basis and, depending on your income, you can get tax reductions simply from contributing to a basic IRA. Researching alternative places to direct disposable income can open up new passive income opportunities and get you that much closer to the retirement of your dreams. When it comes to saving for retirement, your only limit is the one you set on your imagination.
4. Have a retirement budget.
You need to create a plan on how to space out your spending so you don’t draw too quickly from your savings. Start by tracking money that’s coming in as well as expenses for at least three months. Take into account income that’s passive, like from investments, and those tied to your physical presence like your nine-to-five. If you’re planning on working part-time once you retire, include your expected salary. Remember to also look at your retirement savings. Exactly how much is in your employer’s 401(k) and IRA?
Once you’ve listed all your sources of income, figure out your expected monthly expenses during retirement years. Usually, spending reduces to 70% or 80% of what they were before retirement, but that’s just a rule of thumb. A more accurate figure is closer than you think: the bills on your bank statement. Separate essential expenses such as loans, household bills, and mortgage payments from non-essentials like tv subscriptions or gym memberships. You’ll not only know how much you’re spending but also, if you’re ever in a financial bind, you’ll know which expenses to cut to limit financial risk. A baseline income and spending plan can guide you when creating a feasible retirement budget that offers the financial freedom you hope to have in your old age.
The best time is now.
Remember: if you haven’t already started, the best time to start planning for retirement is always now. Schedule an appointment with Dr. Lang today to get your teeth retirement-ready and enjoy the benefits of a healthy, fully-functioning set of teeth.