In the United States today, folks far too often put off saving for retirement until they are on the cusp of leaving the workforce—with no plan and little savings to show for a lifetime’s worth of work. In fact, only 58 percent of Americans are even saving for retirement at all, according to a recent Employee Benefit Research Institute survey, with many choosing instead to rely on Social Security and their families for support in their golden years.
There are lots of potential pitfalls associated with this approach.
So, we’re going to take an in-depth look at the vital issue of retirement planning, and everything that goes along with it, including managing your expectations, deciding when you should begin drawing your Social Security payments, choosing where you’ll live in retirement, planning for long-term care and healthcare expenses, and implementing a tax diversification strategy for your retirement savings.
Managing Your Retirement Expectations (Part 1 of 5)
Despite what you may have read or heard or assumed, the reality is that you don’t have to have millions of dollars in the bank to enjoy a happy, fulfilling retirement. You just need a realistic, workable plan for your specific situation and the commitment to follow through with it.
There are two paths to achieving a happy and fulfilling retirement. The first is to make a list of everything you’ve ever imagined having and doing – building your dream home, driving your dream car, traveling the world in style – and then figure out how to save, invest and accumulate enough money to have and to do all of those things. The second is to determine how much you can reasonably commit to investing and potentially accumulating and then custom tailoring a retirement lifestyle that fits your budget.
So, you might not be able to travel the world by boat like you always dreamed. But maybe you can plan a trip to the coast every other summer. And you might not be able to afford that new Range Rover® you’ve always imagined yourself driving, but you might decide you can get to all of the same places you want to go in a Jeep®. Maybe you’ll even decide that a traditional retirement isn’t for you and choose to work part-time at a job you really like. The point is you have options. There are many paths to the kind of happy and fulfilling retirement that should be your real goal.
So, as you plan for your retirement, the key is to stop worrying about some gigantic, unfeasible “retirement number” at the end of the road and shift your focus to more specific, attainable goals. Once you begin imagining the retirement that is within your reach, you’ll be more motivated than ever to stick to your plan!
In our next installment of our five-part retirement planning series, “The Retirement Game Plan,” we’ll discuss Social Security benefits and the pros and cons of retiring early. In the meantime, if you need to readjust your retirement goals, let’s get together to take a look at your individual situation.
This article was previously printed in a First Command publication.