You’re a decade passed your thirties and now you’re 40. Some might call this age, “over the hill.” Now that you have gone over the hill you realize that retirement has been lurking out of sight at the bottom of the hill. You quickly panic realizing you have done nothing to prepare. Don’t fret! There are steps you can take right away to still live comfortably in retirement.
Now that you are concerned about your retirement plans, it is nice to know that you are not alone. According to the 2019 Retirement Confidence Survey, 6 in 10 workers, 59%, report that they either strongly or somewhat agree with the statement that preparing for retirement makes them feel stressed. The stress will only increase if you have done nothing to plan for your retirement.
Get started on a plan today to ease some stress and set your retirement life up for success. If you follow this guide for retirement planning you can ease some of those post-work plan jitters.
Step One: How Much Do You Actually Need?
So I want to plan for retirement, but where do I start? The best place to start is with some calculations on how much you will need for your retirement. As you can tell by the chart above, the workers with a retirement plan have significantly less in savings overall. Once you are working with a concrete number, the rest of the planning will become simpler and you will end up saving more for your retirement fund.
There is no finite number to put on retirement, as everyone will have different living costs. Some sources will suggest having 8 times your annual salary in your savings by the time you retire. That is only a guideline and without taking the time to crunch some numbers, you will not know exactly what you need.
Calculate and Consider Retiree Health Costs
Among the many other expenses that go along with living, you will need to take how much health care will cost upon retirement into consideration. Health care costs are the top concern for Americans and according to HealthView Services, a 65-year-old couple in good health will need $387,644 to pay for health-care costs after retirement. This is the current rate and with inflation, that number will obviously be much, much higher when it is time for you to retire.
There are many tools you can utilize that use information about your doctors and medications and match you with insurance plans that will offer complete coverage. You will most likely find yourself with lots of choices and it may seem overwhelming.
Get A Professional’s Help
After spending some time researching you may find that you need help deciding who to trust your healthcare with after retirement. Hiring a professional that can help you find the best retirement health solution may be exactly what you need.
Eliminate All Debt If Possible
There are a few ways to go about eliminating debt. You can start with your smallest debts and work your way to the larger ones if you are feeling overwhelmed. Or it may be more advantageous for you to start off with debts with the highest interest rates.
Whatever method you decide on to eliminate your debt, the key is to simply start. There are also debt consolidation programs you can utilize if you find that you need some support and accountability on your road to financial freedom.
I would also highly advise avoiding cosigning for others. With your name on the papers, it becomes your debt as well. You never know what is going to happen and the loan you decided to sign onto can become a nightmare.
Your capable and responsible child or friend may not always prove to be as responsible as they seemed. Cosigning on loans can destroy not only your finances but your relationships as well.
How To Navigate An Income Deficit For Retirement
If you find after careful planning that you may have to work a few more years to feel completely financially secure. If this is the case, consider finding ways in your current budget to cut back to shave off some years before retirement.
Finding alternative ways to earn some passive income or asking for that raise you know you deserve and haven’t requested, are alternative ways of making up for the income deficit for retirement. If later on in retirement you find yourself still struggling there are options for income. A reverse mortgage is an excellent option many retirees utilize. With the help of a reverse mortgage broker, you can eliminate your monthly mortgage payment or access the equity you have in your home if it is already paid off.
When you are prepared for your retirement you will know exactly where you stand financially and be able to relax and focus on that RV trip you have planning for years.