How to Plan for Retirement

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How to Plan for Retirement

October is National Financial Planning Month, which makes it the perfect time to think about retirement. After all, retirement is the ultimate goal of financial planning. It’s the payoff after years of contributing to your 401(k) and dutifully making other investments.

Financial planning is the process of achieving short, intermediate and long-term financial goals. Retirement is seen by many as the ultimate goal of successful financial planning. Let’s take a close look at how to get ready for retirement.

Understand your financial situation

If financial planning is a roadmap to retirement, we’ll begin with cartography. To draw your map, we’ll need all the basic information in one place. Start with what you have. You’ll want to consider your financial assets like savings, bonds and stocks. You should also note physical assets. This is most often real estate, but can include any valuable, tangible assets like collectibles, jewelry and other precious metals.

At this stage of drawing your financial map, you can add liabilities. A liability is financial jargon for owing someone money. Most often, this is in the form of a mortgage or loan. For planning purposes, you’ll want to track how much you owe on your house and when that will be paid off. On the long-term roadmap to retirement, the date you stop paying for a home is a significant intersection. Even if you don’t fully own your home, remember if you owe less than its worth, you have equity.

Now, consider your current monthly budget. What money is coming in? What money is going out? It will help to look at a few months of spending to break down your discretionary and nondiscretionary spending. With a basic roadmap in place, you’ll need to plan for what you want your retirement

How do I know if I’m ready to retire?

By following the tips above, you should have a clear picture of your finances today. But what happens when your regular paycheck stops? You’ll need to crunch a few more numbers to figure out if you’re prepared to retire. Ask yourself these questions:

  1. When do I want to retire? Is your plan to bow out of the workforce at retirement age? Retirement age is the age at which benefits like a pension or Social Security kick in. In most cases that is 65. Deciding when you want to retire establishes a timeline. How you manage your retirement planning will be significantly affected by this timeline. Retiring in a year or in 20 will change how you strategize.
  2. How much money do I need to live? We’ve already looked at your current financial situation. Now it’s time to determine how much you should save up and put toward your retirement. To answer this question, you’ll need to play with some hypotheticals. Many people aim to maintain their lifestyle — meaning their income and spending will be the same after they retire. If your retirement income totals the same as your working income, then you’ve balanced the books. There is also the option to downsize and live on less than you do now. This will require a smaller monthly income. Alternatively, if your dream post-retirement life is all about piña coladas and beachside cabanas,  you’ll need to plump up your monthly budget.
  3. How long does my retirement need to last? This is tough to calculate because there are so many personal variables. It’s best to plan for a long life. No one wants to jump back into the labor pool after a decade of living the carefree retired life. There are many retirement calculators online that can help make your long-term plans.

Consult Retirement Experts

Unless you’re retiring as a stock broker or CPA, the financial piece of retirement may make you feel like a fish out of water. Luckily, there are a number of experts who can help you prepare.

A financial planner can help you understand your current situation and look ahead to retirement. They have the expertise to make decisions about when to retire and how much money you will need to live the lifestyle you want.

AARP recommends the Let’s Make a Plan website for screening trustworthy financial planners.

For some people, having a lawyer may be a worthwhile investment. An administrative law attorney can help navigate Social Security benefits. Lawyers can also give you financial options and assist with tax planning.

*this is not meant to be financial advice, as always consult a professional before taking action with your financial future.

Published by Pride Mobility

Welcome to Pride Mobility! We are a leading manufacturer of mobility products, including power chairs, scooters, lift chairs, and more. Our goal is to help people with mobility challenges live their best lives by providing innovative, high-quality, and reliable products that enhance their independence and comfort. Our company was founded in 1986 with a mission to improve the quality of life for people with mobility limitations. Since then, we have grown to become a global leader in the industry, with a wide range of products designed to meet the unique needs of individuals with varying levels of mobility. At Pride Mobility, we are committed to delivering exceptional customer service and support. Our team of knowledgeable and experienced professionals is dedicated to helping our customers find the right products to meet their specific needs, and we are always here to answer any questions or concerns. We take pride in our products and stand behind them with a comprehensive warranty and service program. Whether you are looking for a power chair to help you navigate your home or a scooter to explore the outdoors, you can trust Pride Mobility to provide the quality, comfort, and reliability you deserve. Thank you for choosing Pride Mobility as your partner in mobility. We look forward to helping you live your best life!

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