Tuesday, August 12, 2008

Retirement Planning: 4 Tips to Help you Retire Worry Free

Retirement Planning: 4 Tips to Help you Retire Worry Free
By: Jim Gianoglio.

Retirement planning can be stressful. If you think about it, you are planning for a time in your life when you won’t be working, yet you’ll still be consuming. There are a lot of things to consider in addition to day-to-day expenses: extended health care, emergencies, planning a legacy… the list is long. How can you make sure you are saving enough for retirement?

Here are four ways you can plan for your retirement worry free:

1. Know yourself and prepare for change. Try out new roles in social, community, charitable, cultural, or recreational organizations and try new activities before you retire. Why? Because it’s important to know what you’ll be interested in so you have an idea of what kind of expenses you’ll face. In retirement you are going to have needs to fulfill and require new ways to keep stimulated. Now’s the time to figure out what your “drivers” are and what’s really important to you, if you haven’t already.

2. Increase savings. Having to increase your savings shouldn’t surprise you, especially if you hope to retire early. Put money aside whenever possible. One great way to save is to set up an automatic savings plan, or to boost your contributions if you already have one. Try and invest your income tax refund instead of spending it.

3. Plan for a longer retirement. Thanks to medical advances and healthier lifestyles, people are living longer. Sounds great, right? The only downside is you now have to plan for a longer retirement. Previously, you could expect to spend 15-20 years in retirement. Today, you should plan on creating a savings that will last for potentially 30 years.

4. Upsizing or downsizing. It is easy to say you don’t need to save as much because you won’t be as active and can downsize your lifestyle. In many cases, retirement is exactly the opposite. Extensive travel, fine dining, and joining an exclusive golf club are just a few of the upsizing many retirees embrace. While either choice is possible, they both require forward planning. The key to being successful with your planning is to be honest. Realistically decide if you want to live it up now that you have the time, and then tailor your financial plan to it.

Remember, retirement is your chance to do the things you’ve always wanted to do, but didn’t have time for. Using an online retirement planning calculator will get you started, but don’t stop there. A professional financial advisor can help you make your retirement an exciting new life by being financially prepared.

Retirement Planning Calculator