A dream retirement may mean different things to different people. Maybe you want to transition from full-time employment to a fulfilling and passionate part-time work, or you envision yourself visiting your bucket-list travel destinations, or maybe, you simply want to spend more time with family and friends. Whatever gives you peace of mind in your golden age is worth planning for right now, regardless of your age. Some of the top tips for planning a dream retirement include:
Start Saving More
With the rising cost of living, you’ll definitely need much more money in your retirement, so, work towards saving at every given opportunity. The point is to spend carefully but not feel deprived. Determine what lifestyle you want and budget for it wisely, which means differentiating between needs and wants as well as finding new ways to cut down on expenses. Also, don’t ignore your debts in the hope of saving more. Cutting down on your current debts means you’ll worry less when you retire.
Keep Your Health in Check
You must be as healthy as possible to enjoy your dream retirement. Preventive medical attention goes a long way. This includes going for check-ups and preventive exams regularly. Commit to maintaining a healthy lifestyle, which includes your general attitude, eating habits, and level of activity. Your medical expenses will most likely spike later in life due to old-age-related illnesses; so, remember to plan for future healthcare expenses if you want a stress-free retirement.
Suitable Asset Allocation
Your lifetime returns are often influenced by the ratio of stocks to bonds in your investment portfolio. To fund many years of retirement, part of your portfolio needs to be dedicated towards stock ownership. However, ensure you spread your investments to as many companies and nations as possible to mitigate the risk. Your portfolio should reflect your personal goals, time horizon, and current financial situation.
Stay Financially Flexible
Do you run a yearly review of your spending? Well, this is the best way to track your actual spending and investments returns. Don’t be afraid to seek the help of a financial adviser to help you determine areas that need to be changed. If you realize a spending shock, cut back the next year. Also, avoid lifestyle creep, which means increasing your expenses as your earnings increase.
Consult the Experts
Planning for your retirement is a huge responsibility, and a little help goes a long way. You need a financial planner to discuss your future plans with, to outsource the responsibility for tracking your finances, to ensure your plan stays on track, and even help you determine how to use your assets. You can also talk to your current employer’s human resource department to take advantage of the available retirement plans. In addition, attend retirement planning seminars organized by your bank or credit union. Finally, use Moneyfarm’s pension calculator to help you get a better picture of your retirement plan, including how much you need to save and if you’re on the right track.
