Unfortunately, it’s not so easy to answer the question, “what retirement plan is right for me?” But there’s no shortage of planning for retirement tips on the internet that strive to answer that question for you.
Saving for retirement is not quite as simple as putting away a fixed percentage of your paycheck. Everyone’s retirement needs will be different, as is how much they can save each month. Rather than blindly following an overly broad or general set of retirement savings guidelines, it’s important to come up with a comprehensive retirement plan that’s suited to you. One way to help formulate your plan is to ask yourself the following questions.
Planning for retirement tip 1: Ask yourself what your target savings level is. The key to coming up with a comprehensive retirement plan is knowing how much you need to have saved by the time you reach your desired retirement age. But simply choosing a nice round number out of thin air and assuming that it will satisfy your goals is a flawed strategy. Your task in planning for retirement isn’t really to accumulate a particular level of savings; it’s to accumulate whatever amount is necessary to fund the retirement lifestyle that you desire.
Planning for retirement tip 2: Determine what type of retirement lifestyle you want. With all other things being equal, a person who envisions his or her retirement lifestyle as living in a cabin in the Montana woods will need a smaller nest egg than someone who wants to retire to New York City to immerse himself or herself in the arts and fine dining cultures. By identifying your desired retirement lifestyle, you’ll be able to come up with financial targets that are based on your individual goals.
Planning for retirement tip 3: Determine if your investment returns match your assumptions. As you age, you’ll be able to evaluate whether the actual returns you are generating with your retirement savings match your retirement plan. If your returns are falling short of expectations, you should investigate how less common investment types — such as those that you can hold within a self-directed IRA — can help you reach your goals.
Planning for retirement tip 4: Has your situation changed? It’s not just age milestones that should factor into your comprehensive retirement planning, but significant life milestones as well. For example, getting married (or divorced) might require you to significantly alter your retirement plan. Similarly, having children (or grandchildren) may cause a shift in your financial priorities both now and into the future.
Planning for retirement tip 5: Are you leading a healthy lifestyle? If you haven’t included significant medical expenses into your retirement budget, then you’re assuming you’ll be relatively healthy during retirement. Unfortunately, good health during the later years of life doesn’t come automatically. It’s important to lead a healthy lifestyle now to increase the chances that you won’t be burdened with large hospital and doctor bills during your retirement years.
Finally, it’s also important to understand that you should revisit these areas periodically to see if your answers remain the same, because any changes may require modifications to your overall retirement savings plan.
Quest Trust Company helps change people’s lives and financial future throughself-directed IRA investment education. Quest Trust Company helps people invest in what they know best and build their financial future on their own terms.