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Tags: finance, retirement planning, living well when you retire
 Let’s be honest, not everyone saves enough in order to retire since not everyone does retirement planning. With the myriad of expenses that we face daily, both expected and unexpected, it is often difficult to put money away for the future. While retirement planning sounds a wee bit complicated, it is still doable in order to achieve your goal of living well when you retire.
You just need to understand key retirement planning opportunities that may affect you and your future. More importantly, you just need to start. The first step in retirement planning is to track down your money—a lot of people don’t have an idea how much they have so they have no clue as to how much they can look forward to when they are not working anymore.
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To find out how much of your money can be used in retirement planning simply add up the total value of all your current assets. Don’t count emergency money, or educational savings and such—just count assets that you know you will not be touching within the next 10-15 years. Once you have calculated the monies that you can use for your savings the next step in retirement planning is to calculate your future expenses because let’s face it, even if you’re not working, your expenses would still be there and in fact has more effect since you're not working anymore.
Some say the rule is that you need to generate at least 75% of your pre-retirement income but that may be too broad—remember that when you retire your spending habits will change. Determining how much you will be spending can help you figure out how much you really need to put aside now in order for you to retire comfortably.
Some expenses should disappear. By the time you stop working you should have already paid off your mortgages, even if it was for 36 years. At the same time you may have already paid off all your loans, be it personal, or student—yours or your children. Your work related expenses should also decrease, as well as personal and home spending such as for tools since you may have already collected them during the years.
At the same time, certain expenses will increase. While you may have paid off your mortgage you will still be liable for the yearly property taxes incurred, as well as home assessments, unless of course you move to a location that have lower costs. Also, since you will be staying at home more often your utility bills, water, power/electricity, and gas, will increase as you use more of them.
And since you would have nothing to do with all the free time that you suddenly find yourself with your travel, hobby and entertainment expenses may also rise. You may plan certain projects like building a boat or a shack in your backyard. You may also travel around the country more in an RV with people such as yourself or eat out more as you now have more time to socialize and take in the things you didn’t have the time to do before.
Finally, don’t forget that your medical bills would also increase. These include doctor visits, as well as prescription and non-prescription drugs. Once you know your expenses, you will now how much you need to put aside in order to not only cover this amount but also have enough extra for those things that may arise.
Don’t forget to factor in inflation in your retirement planning. It is a major factor in determining how much money you will need to retire. If your money is not earning more than the inflation rate, you will wind up with less to spend when you do retire. Retirement planning can improve your current retirement outlook.
The more time you have to prepare, the more you can affect your income for easier living in the future.
About the author
The author of this article Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick recently published a book on how to manage your money and attract Wealth and Financial Freedom. More info on his Finance Planning course is available HERE.
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