People are worried about their retirement assets especially in light of the current economy. In this article the top 5 questions that a person should ask are discussed.
We work all of our lives for several reasons but one of the most important to the majority of people is so that one day we can retire. When we retire we want to enjoy the years of effort and labor we have put into our jobs or careers. As we approach retirement there are 5 questions that you really have to ask yourself. Once you have answered these questions you will have a blueprint of retirement.
1. What is the ultimate goal? – For many people relaxing and working in their yard is the ultimate. For others seeing and traveling around the world is their vision of happiness. Determine the type of lifestyle you want. This will help you determine other things like where will you live? How much are you going to need for monthly expenses etc.
2. Do you or will you have the necessary resources? – What do you currently have set aside for retirement? This is the starting point. Hoping that things will happen is not going to get you where you want to go. Then how much is your “ideal lifestyle going to cost? Most planners will tell you that will need 60% to 80% for your pre-retirement income. This however is simply a rule of thumb. That is why it is best to sit down and look at your actual expenses and then add the things that your retirement lifestyle will require. Make sure the basics are covered first and then go from there.
3. Where are we going to live? – When we are just getting started we tend to live where our jobs and careers take us. This may or may not be the least expensive place to live. You should take that into consideration when you plan your location for retirement. There are a lot of choices out there. You don’t have to retire where you have lived during your working years. Things to think about are access to healthcare, cost of housing, proximity to family, taxes, weather conditions year around, closeness of airports, and access to entertainment. This list is in no particular order. Match the aspects of your ideal retirement with the list and put them in priority. The order may change as you age.
4. Should I plan to sell my home and if so when? – Most people monitor their retirement portfolios. While this is important for many a large portion of their wealth is tied up in their home. This means that they could free up a large portion of their assets by selling their home. It may make sense to sell your current home and move to a place where the cost of living is lower. You may be able to pay cash for another home and still have money left over. You may also want to down size. Don’t dismiss this option immediately. Timing is also important. If the market is down in your area you may want to wait. If it is up you may want to put it on the market right away.
5. What is your plan for your estate? – This is an area that I see people ignore over and over. They think this will just take care of itself. It will but maybe not the way you would want. Do not assume that your spouse will automatically receive all of your assets at your death. In some states the surviving spouse has to right to the deceased spouse’s portion of the assets. A will is the only way to insure things are divided according to your wishes. There may or may not be a need for life insurance. Again don’t assume regardless of your age whether this is true or not. Advanced planning in this area will pay huge dividends.
So now you have my top 5 things to consider when you prepare for your retirement. The sooner you get started the more options your will have. Time is your biggest asset. Since we really don’t know how much time you actually have on the Earth it is better to get started.