Here’s a quick exercise: take a few minutes to think about what your life will be like at 80. How do you envision life for yourself and your spouse? It may seem like ages from now but whether you see yourself as a sweet grandparent baking cookies with the grand kids or a lively octogenarian traveling the world, achieving a blissful retirement involves being mentally and financially prepared.
No matter your age, it is never too early (or too late) to begin thinking about such a highly-anticipated life stage. Setting aside just a few hours now to plan out your retirement can ensure that your 80 year old self will be able to live the life you envision. Once you have answered these questions, you can feel confident in your choice for retirement.
What is your life like right now?
This is a consideration especially important for middle-aged folks. Do you love the career you’re currently in? Do you envision yourself continuing to move forward in your career path or are you looking forward to moving on? This may tell you if you’re mentally closer to retirement than you thought.
What does retirement look like?
Although you just took a few minutes picturing retirement, we recommend spending some more time thinking about how this looks. The common perception of retirement includes slow, easy going days filled with naps. While this may be appealing for a few weeks or months, how do you think you would handle impending boredom once the novelty wears off?
Consider how you would spend an average day during retirement. This may impact how early you retire—if you imagine yourself traveling and crossing off activities from a bucket list, you may want to consider retiring in your late 50s or early 60s before your mobility declines.
How much have you saved for retirement?
When retirement is mentioned, the one topic that always comes up is money. Of course, this makes sense since you won’t want to worry about making ends meet at 85. When you think about the lifestyle you currently have, this is a topic worth considering since you will need to determine what you need to continue living comfortably well into your golden years.
You can easily check on your pension from your employer or on your social security benefits by visiting their website. Since you don’t want to rely solely on one source of income and if you haven’t already, consider opening other savings accounts geared towards retirement, such as an IRA or 401K, and make regular deposits.
How much more do you need to save?
Once you have figured out how much you have saved, you will need to determine how much more you will need to save to live comfortably for the next twenty or so years. There are plenty of retirement calculators available online that will quickly calculate how much you will need to save. An easy to use favorite is this one from CNN Money. Even if you are close to the suggested goal, it doesn’t hurt to continue adding more money in case of emergencies.
Now, we know that life can throw you a curve ball every so often. That’s why we have our comprehensive 72t rule guide on how to retire early without the 10% penalty. For more information, check out our guide and also, feel free to give us a call or use our contact form to ask your personal questions. We look forward to speaking to you soon.