Wednesday, October 31, 2018
9 Keys to a Happy Retirement
We all want to have a comfortable retirement. Finding that right balance of living in the now and preparing for the future is tough. I have seen all extremes. From the person that squirrels away every cent to the person who literally has no clue that they shouldn’t go into debt. There must be a happy medium. Saving and planning for retirement can’t be that complicated, right? I want to take you through 9 Key Points to having a Happy Retirement. Hopefully, you will take one or two of them and roll into a plan designed especially for you.
1) Start thinking about what retirement looks like to you
One of the major issues with people and retirement planning is that it seems so distant to them. They can’t conceptualize not working. That’s alright. What you need to do is think about what you enjoy doing most in life. Think about all the things you would do if you only had the time. Think about the things you don’t like either. Is your job one of them? What would you do if you didn’t have to work anymore? It’s important to understand that retirement is more about you than anything else. While we go through the motions of life, you have to have the ultimate goal of retirement in the back of your head. The reason is simple. Not everyone chooses to retire, sometimes it is chosen for them. It is because of this that we must think about what not working would look like for us.
2) Start saving something as soon as possible
I have heard literally every excuse in the book for not saving for retirement. Life is too expensive. I will probably be dead by then anyway. My kids are too needy. I need annual vacations. The dog needed surgery. The truth is none of them hold water. You must save something for retirement. The reason for that is simple as well. Retirement savings may or may not be used for retirement. It may be used to give to your children or favorite cause. It may be used to buy a cottage or RV to travel around the country. It may have to be used to cover expenses during dire financial hardship. What saving for retirement actual equates to is that you are putting money away that you know you won’t use for a while. You are prepping for the future. Savings is king and if you don’t save a penny you literally have no options in life. None.
3) Take advantages of matches
Who likes free money? I know I do. If you are one of the lucky ones who has an employee retirement program where the employer will match your contributions, you must take advantage of it. This is the best way to accelerate your retirement savings. This type of program can help you speed up your retirement timeline, or even allow you to retire at all. Always contribute at least up to the matching point. If you do it will help you achieve your goals much faster than you would have otherwise.
4) Work as a team
When in a relationship, you must work as a team. The reason is simple. If you are living together as a couple, you both need to reach retirement comfortably. This is especially important if you have one spouse who receives a company pension and the other who does not. I have seen many times where both spouses are reliant on the one having that golden pension in retirement. You must consider that the pension may or may not be there when it comes time to collect. Bankruptcy, health issues, divorce or job loss could derail this plan. My advice would be to devise a savings strategy outside of the company pension as well. Also, focus on keeping pace with each other in terms of spending. You must be on the same page or else bitterness could develop. You can’t have a saver and a spender working together. Address these issues before they become an open sore.
5) Pick a date
Again, retirement seems so far away, so picking a date to dip is a tough task. Understand that this date will change. Think about the most likely date you will either have to or want to retire. As time goes on adjust this date. Why it is important to pick a date, even if you know it will change, is because it allows you to develop a plan and follow it. If you pick a date you can now save accordingly. As that date changes, if it changes, you can now adjust your retirement savings plan. This also helps you invest properly and protect your assets properly. All are needed for proper retirement planning.
6) Find your passion
Finding out what you love to do is so very important. Let’s face it, most of us aren’t lucky enough to love what we do for a living. We must pay the bills and that is our reality. Finding your passion is important because if you can find something that you love to do, and it provides even a modest amount of income, you can transition that into your retirement income supplement. It could be the difference between retiring comfortably and not. It also will get you out of the house and keep you social during what may be a boring time in life. Even something as simple as an extra $100 a week could make a massive difference and if you love it, it won’t seem like work at all.
7) Be debt-free and maintain it
I cannot emphasize how important it is to be debt-free when getting to retirement age. Actually, being debt-free is important for people during their working years as well. The reason it is important isn’t that complicated. The money you OWE, you pay interest on. On the reverse side of it, the money you OWN, you make interest on. Carrying crippling interest payments into retirement will delay if not eliminate your dreams of retirement. Those who do not have any debt when retired can live on far less than those that do. It also allows you to save more during your working years as well. This combination of factors should be a motivating force to get you debt free. I can honestly say that being debt-free is more important than saving for retirement if you had to choose one. Don’t choose one though, do both.
8) Stay healthy
Being unhealthy is very expensive. Lost time off work, medical costs and mental anguish all add up over time. An unhealthy retirement can be painful and quite costly. It could also be quite short as well. Make sure during your working years you are taking the steps to have a healthy retirement. This includes regular doctor’s visits, seeing the dentist, exercise and eating right. Our bodies wear down over time but that can be avoided with even a little bit of diligence.
9) It’s always better more than less
Always, and I mean always, err on the side of more for retirement. I always get puzzled when people balk at saving for long-term goals. Yes, you could die tomorrow. You could also live to 90. The odds of living to 90 are higher than dying young. The only outcome for you, if you save too much money, would be an early retirement or leaving your family a legacy. Sounds terrible right? The outcomes of not saving enough for retirement are quite the opposite. Outliving your money is everyone’s fear and it is a stark reality for many seniors. If you know something is good for you, more of it is logically even better for you. Don’t let anyone get in the way of you providing for your future self.
The first step to retirement planning is conceptualizing that there will be a day that you don’t work anymore. Also understand that there are obstacles that get in the way of this goal, so protection is necessary. By making even small steps you can see a great outcome. Remember that we must choose the manner in which we retire. If we don’t, sadly we will have no choice.
“A secure retirement is one of the pillars of middle-class life. For all too many, however, that pillar needs more support.” – Thomas E. Perez
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