A couple of weeks ago my mother had surgery. During the first day or two of her recovery, my Daddy and I had more time to talk just the two of us than we have had in a long time. He suggested that I consider retiring when my son gets out of college while I can enjoy traveling. I shared with him that I like that idea, but I enjoy what I do. And, since my work doesn’t involve the 24/7 responsibility of a farm, I can probably do both.
The longer we live retirement is getting closer. I’ve been saving some for retirement for years. But that conversation with Daddy got me thinking about retirement. During Tennessee Saves Week, there’s no better time for us all to reconsider how our current retirement savings and investments will stack up to the needs and wants we will have later in life. This involves answering many questions. They aren’t complex, but people still tend to avoid answering them. Here are some to get you started thinking about retirement.
If you have changed jobs, did you roll your retirement savings over to a new account? Do you know where that money is? It’s important to have an accounting of where your retirement assets are. If you don’t have a list, start tracking this down and make one–including the amount of money in each account.
Once you have that listing, research the rate of return those accounts have made. Compare the rates to other similar accounts and consider the timeframe. You can do this research on your own or with the help of your financial advisor.
Next step? Determine how much income you will need to have the lifestyle you want in retirement. Some of your current expenses will go away; while others are likely to increase. One expense that’s likely to increase will be healthcare costs. Taking care of yourself now (eating right, stopping smoking, exercise) may help keep these costs down, but that’s no promise. Another part of this equation is determining where you will live in retirement. The house where you currently live may suffice nicely for a while if it is paid for, but you may decide to downsize or move to an area of the country that has lower living expenses. But what if you dream locale costs more? Find out now so you can plan toward making that dream come true.
Compare your expected income from your current retirement assets and your potential living expenses. You will need to gather some information to use calculators, like Ballpark Estimator, to help you determine where you stand. Have a gap? It’s not too late to close it but you’ll have to get busy. In Friday’s post, I’ll share ideas for closing it; but in the meantime, enroll in Personal Financial Management Made Easy to start a path to greater financial savvy and security–both now and in the future!