There is a 38% chance you will live 20 years after retirement if you retire at the age of 65, according to Forbes. With such a long life expectancy after retirement, the best time to plan your future is now. Whether you are 20 or 30, it is never too early to start saving. If you are looking forward to a happy experience once your employment years end, making your income last through retirement should be your objective.
Set Financial Goals
It is mandatory to have a savings plan for retirement. In fact, you should be saving 80% of your pre-retirement income to ensure you have enough funds to sustain you. However, your current income, personal goals, and lifestyle will determine if you need more or less to survive through retirement. You also need to ask yourself where your revenue will come from when you retire. Do you have a retirement plan that accounts for your assets and sources of income like home equity, social security, or pension? By answering these questions, you will have an idea of the amount you need to save for retirement every month.
Take Fewer Risks
Investing in a way that guarantees high returns depending on your risk tolerance is not a priority when you retire. Instead, you focus on ensuring the savings you have accumulated sustain the best retirement lifestyle, which can last up to 30 years. So when investing, take fewer risk to avoid low returns that you may not recover from. If you are not sure how to make smart investments, talk to a financial expert to find out the right amount of risk you need in your portfolio to attract growth without exposing yourself to low returns.
Think About Health Care Cost
Healthcare is one of the most overlooked aspects when planning for retirement. Given that the current healthcare cost for retirees is $285,000, you must factor in how you will moderate medical expenses. You can start by reviewing your current plan, and choose hospitals covered in your policy. Open a health savings account, manage your retirement income, and apply for long-term care insurance.
Your financial wellness has a lot to do with how you enjoy your retirement years. However, you should not focus only on savings or investments. Think of hobbies that make you happy or volunteer for a cause that brings you joy. You may also want to go for a trip to unwind, rediscover yourself, or find new hobbies. Make sure the activities you choose help you maintain an active and healthy lifestyle.