Are you starting to get closer to retirement? If so, have you taken the time to sit down with a professional wealth manager or advisor to discuss your financial outlook? Or, perhaps, you’ve largely ignored retirement and haven’t thought about how much it will cost to live from month to month when you do call it quits. Retirement can be a very gratifying time in your life, but if you don’t plan for it, it can be the complete opposite: a huge headache. If you still haven’t taken the time to consider how much money you will need when you walk out of the office for the last time, then now is a good time to start.
Are You Ready?
When it comes to retiring comfortably you will need to consider a lot, including all the various expenses you are going to have. In fact, the two basic questions you must ask yourself are how much you will need to continue living the current or desired lifestyle you have in retirement, and how much you will be able to save. In addition, there are other important aspects to keep in mind when you start getting closer to retirement because of course, you can’t predict everything that’s going to happen after you leave the workforce for good.
Expect the Unexpected
There are several life events that could leave you totally unprepared for life in retirement. Let’s look at some of the most significant. Losing Your Spouse – Although death is inevitable, no one is ever ready to lose his or her spouse. However, it can complicate matters even more if you were counting on your spouse’s income during retirement. With that money unavailable, you will have to come up with another way to save enough now. Divorce – Like losing your spouse to death, divorce can also be very costly to your retirement plans. Not only will you lose the comfort of two incomes, but if you are the primary breadwinner, then you may be required to pay some portion of your income to your former spouse on top of child support, if applicable. This could greatly limit how much you can save for retirement. Losing Your Job – While you might be properly planning for your retirement, what happens if you unexpectedly lose your job? Would you be ready to survive without that income? If you can find another job with a similar income, then you should be ok. But what if you can’t, or it takes a couple of years to get back on your feet? This could hurt your ability to save, which means you will have less in retirement, or you must work longer to reach your goal.
Declining Stock Market
Many retired people rely on income from the stock market to help get by after they quit working. But what happens if the stock market crashes or takes a continual dip down over a long period? This could also greatly affect your ability to save for retirement. While retirement can be a blissful time focused on hobbies, family, and travel, there are many aspects that can affect the lifestyle you imagine for yourself. Take the time now to consider those aspects, and prioritize making a plan for unexpected events.