How Much Will You Need to Retire?
This is like asking ‘how prepared are you?’ There are many basic retirement plans out there, those mandated by the government and those that are not. There is the 401k at work, Social Security or some life insurance. Sometimes this is not enough. There are so many opportunities out there and great old-age need that must be addressed so a carefully planned retirement plan is very important. This is one instance where punctuality and foresight are badly needed.
To answer the question above, it is good to answer this one first: What is your ideal retirement activity? Individuals planning for their retirement must have a clear vision of how they would like to spend their retirement, where they would like to spend the retirement fund, and up to what extent will they be spending it. Practical and realistic ideas are very important since the kind of ‘retirement’ advertised on televisions is not always true for everybody. Not every retiree can play gold in the morning or take a cruise for extended period of time. Not everyone can stand being idle for long hours. So this is where realistic planning enters the picture.
Choosing the retirement activity you envision to engage in will directly affect the amount or type of retirement fund you will set aside. Health concerns should also be part of the plan. If a portion of the retirement fund will be for leisure, something should also be put aside for healthcare.
You can make your retirement plan come true by envisioning up to the minutest detail how your life will be after retirement. You can list all the things you will need in your new life—a small house for yourself only where you can enjoy doing your favorite pastime, a vehicle especially designed for mountainous terrain if that is where you feel like going, list of all the cities you would like to visit after retirement or even caring for a pet which you can not have time for while busy working. It would be a new life for you, a life where you are the only master and at the same time worker—as of the moment.
Retirement is well anticipated by many but there are those who can not help but fear the unknown. This is understandable. People are sometimes afraid of planning especially for something they have not a single idea. The question of ‘how much’ adds to their worries. For starters they should take note of how much they need in their current state and then compare it with how much this will be after retirement. For example, a 50-year-old mother of three is sending her kids to college. What she’s spending right now is way over what she’ll need after retirement since the kids could probably have their own families by then. So her fears of not having enough could be based on her current status. Talking to a financial adviser while she is still capable of earning and providing for her self will make the transition to retirement in as smooth a way as possible.
