How to Plan and Orchestrate a Long and Successful Retirement

8 min read

People tend to live in today’s world fully while ignoring about the future. Well, you should hope to have the same current lifestyle during your retirement days. However, that doesn’t come automatically you have to have clear cuts on your finances. How? By having a successful retirement plan.

Retirement planning

It’s a continuous process of setting achievable income goals for future when you retire. It includes estimating expenses, identifying your sources of income, managing assets, and coming up with a saving plan.

It’s true many people fear retirement because they worry about what happens when they reduce their income. However, retirement planning is not rocket science, here is how to plan for a successful retirement to secure your future.

Retirement plan

Retirement age

You are already figuring out how many years you want to work. Determining when to retire tells you how long it will take to save money. Once you know how long you want to work, you must decide how much you want to save during your retirement.

Life expectancy

Estimating life expectancy is always shocking. But you should not. You need it to know the number of years you should save for.

Work after retirement

You have to consider whether you will continue working after retirement or not. If you keep working before you attain full retirement age, your social security benefits may reduce. But after retirement, you get no limits on your annual income. Thus, such factor can help you decide how much to save.

Evaluate your financial conditions

First, count all current assets, liabilities, income, and expenses. You can sit with a retired planner and estimate your responsibilities and costs. When you retire, some fees may remain the same, such as groceries insurance, and others.

However, some costs may increase, such as travel expenses, vacation expenses, and reduced spending on adult children. Some fees will also be paid for by pensions and social security. Highlight the troubles and problems that bother you at night and discuss with your planners.

Estimate how much to save

Check how much you need on your retirement account to retire comfortably. Regardless of whether you use one of the standard formulas or specify expenditure estimates, this is a critical step.

Many variables will affect this number:

  • Do you want to continue working part-time or less stressful or demanding work? If you think you will have retirement income, estimate it conservatively.
  • Do you have a pension or 401K from your job that will supplement your income?
  • Are you considering moving to a place with lower cost of living and a calmer lifestyle? Some ideas can be found in our section of the pensioners’ community.
  • Are you willing to trade down to a smaller home to reduce your housing costs? If you have your home for many years, you can even invest capital into your retirement account.
  • Calculate the value of assets and liabilities

Here are some tips to determine the current value of your assets.

  • Make a note of the current amount in each account where you save liquid and cash.
  • If you have a deposit, calculate and determine the present value or call the bank assistant for help.
  • Call your agent to find out the cost of your entire life policy.
  • Invest in stocks, bonds or mutual funds and check the value of the financial website or your last statement.
  • Use the current value of your home and another real status.
  • List the current value of your pension, IRA or other retirement plans. If you decide to cash them today, try to understand their value.
  • Also, remember other assets such as commercial and rental properties.
  • The balance of your home mortgage is a monthly liability.
  • Also, remember all other mortgage or home equity loans.
  • Record credit card, installment, loan, and investment account balances.
  • List all current and excess bills you owe. These include utilities, doctors, water, gas, telephones, property taxes, etc.

Saving for your retirement

The compound interest

When you start saving the value of compound interest can be difficult to estimate. However, the compounding interest over the years becomes very significant. What you need is to be diligence and patient. You only enjoy the benefits of a compound interest after you commit yourself in saving even in hard times.

For example, let’s assume you’re 22, planning to retire at 65 if given interest of 6.5% p.a you will have $323,030 at the age of 65.

Know how much to save

Don’t confuse yourself in any way. Make a list of all things you must be consistent with your lifestyle after you retire. Do you know how much it will cost to retire and live comfortably?

Well, research shows that you need to replace 70-90% of pre-retirement income. It can help you estimate your goals based on current revenue. Although this is a rough estimate, keep this in mind to get you on the right track.

Plan how much to save monthly based on your earnings per month. Remember you must be committed towards that goal.

Find a way to increase your savings

Remember even if you had planned on the amount to save, it doesn’t do any harm if you adjust it. When you clear all debts or your children start supporting themselves, you can add any extra coin to the saving.

Once your budget is in place, it should be reviewed annually to determine if additions and reductions are changing the program budget.

Don’t withdraw your money

Any withdrawal will only reduce the total future interest. Your budget is an integral part of your pre-retirement and retirement cash flow plans.

Emergency fund

Let’s face it; there will be unexpected financial problems at a point. So its safe to have side savings to help you meet your inevitable needs, it’s always a good idea.

Your contingency fund should be fluidly put on hold because you never know the time or situation you might need. The total amount needs to be determined by you and your family and should be at your comfort level.

Risk Management

One overlooked area in retirement plans is risk management. People usually focus on saving for retirement. However, they forgot to put risk management in their minds. Risk management includes car insurance, house insurance, short/long-term disability, and health insurance. You need to develop policies for these and should monitor, review and update as needed.

Investments and savings

If you start your saving for your retirement late, there is no problem at all. The key to expecting success is favorable prospects and understanding, and it’s always better than never to start!

If you are 55 years old, the government can save additional costs so you can get more help. Sometimes the savings account and employee pension are not likely to achieve your goals. That’s when you explore investment products.

If you plan to improve your standard of living and maintain a financial position for a long time, it is always good to invest in your side. There are many different ways to save money, but the IRA account has proven to be the best. If you don’t know yet, search from the internet for guidance.

Create a diversified savings account, investment, stock, bond, property, and insurance portfolio to help your interests.

Develop strategies to maximize social security income

Social security may still be an essential part of your retirement plan, so maximizing this benefit is critical.

You should extend the age at which you will start making withdrawals. Also, the more you wait, the more you will pay. If you wait until the age of 70, your payment will increase to 77%.

You should check if you can have another retirement befits apart from the one you have. If you’re married, divorced, or widowed, you may also be eligible to apply for a “spouse” or even “survivor” benefit. Although, these are based on your records with your spouse, whether they are dead or alive.

Remember not to propose two or more types of benefits at once. If you apply at the same time, you may lose one of them. Develop a strategy to declare the smaller one first, then the larger one.

Social Security uses the best 35 years of your career to calculate your monthly income. If your working time is less than 35 years, continue with your job.

Review and Revise your Plan often

Remember to focus on your savings. Need to be updated and changed as needed. Check your retirement plan every year. Nothing is immutable, and through a stable and robust plan, you will live a happy retirement. All you need is to make yourself in a successful and organized position.

Retirement is a life transition process. Like other major life transitions, retirement requires you to adapt and grow. You may have some sad moments, such as leaving your workplace, colleagues, ups and downs, lack of money, and so on.

However, these sad moments will not last forever! Your efforts to balance your life before retirement and during your retirement will help ensure that your retirement is smooth and painless.

Although you decide on retirement act within a day or week, the retirement process takes place a few years before you leave. Retirement cannot succeed overnight and requires in-depth planning and preparation. Depending on your interests, activities and health fluctuations, your retirement plan may even change in some aspects of your life.

Well, I believe you’re ready to plan your retirement, relax and enjoy!