Don’t Plan Your Retirement Without Asking Yourself This Crucial Question

Advisor July 18, 2019

A lot of people express confidence in the plans they have in place for retirement. They have a particular sum of money they save monthly, they have already considered a good time to retire and have thought about the actual sum they want to have in their retirement savings upon retirement.

These questions are important ones and they have pretty much covered the fundamentals. However, there is actually a particular factor that a lot of people do not put into consideration when they are thinking up their plan for retirement.

The simple one piece that is missing from the plan of several people is the retirement plan itself. In essence, What exactly is your retirement plan? Having numbers in mind, definite projects and also calculations are also important. However, they have no meaning if you do not actually think about what exactly you play doing during retirement.

Knowing what exactly you have planned for retirement is very essential

Most times, people have well-prepared 401K statements, their amounts for deposits monthly, their investments, among other vital considerations. However, when they are asked about what they plan to do during retirement, a lot of the times they do not have a cogent answer to give.

Important Reasons To Have A Retirement Plan

There are 2 important reasons why it is very crucial that you think through those last years after retirement and about what you have planned.

The first important reason is that if you do not know the particular thing you’ll be doing upon retirement, the chances are slim that you’ll know the exact amount you’ll be needing upon retirement. For instance, where you plan to spend the rest of your life upon retirement will determine how much you need to save up for retirement.

While living in some particular locations and accommodations will cost you so much, others will cost you less. However, there is little or no way you will be able to have a specific savings target if you do not know this.

If you don’t know what you’ll be doing after retirement, you will likely not know the exact amount you’ll need upon retirement

Plans After Retirement

The next important reason why you should have a retirement plan is that it helps you envision what you plan on actually doing when you retire. It’s exciting to be planning towards retirement. As a matter of fact, it is a great achievement to have been inactive employment for so long and to set aside what can sustain you through retirement. However, upon retirement what will you do?

One thing that has been discovered by various surveys is that having no form of responsibilities at the initial stage may seem like a great idea. However, how long can one keep on reading or tending the garden? Retirement isn’t a one-month thing.

It can last for as long as thirty years. It is long-term and for that, you need to have long-term plans. There are times when retirees feel lonely, depressed or bored in the later years of the retirement. The primary reason for that is usually because they do not have a routine, purpose and social interaction that comes with working. Knowing right from the onset what you intend to do on a long-term basis upon retirement will make things a lot easier

Retirement is long-term and you need a long-term plan to navigate the period

Important Questions

Thus, before you begin to mull over the numbers, the important questions to ask yourself include:

Where exactly do I plan to live? If your plan is to relocate upon retirement will you be moving to a more or even less expensive city or home?
What goals and dreams do I have in retirement?
What do I place the most importance on?
Upon retirement, do I intend to assist my children with their finances?
Will I have enough to finance my healthcare costs? This is important because health costs most times increase when you retire
When necessary, am I sure my family can and will actually be of help?
Will I be interested in working? It may be true that you no longer need an income. However, doing a part-time job, making investments in a particular project or even writing your own book can give you a desired feeling of purpose.

The end results of considering these questions aren’t to discourage people from checking their numbers. Doing that is equally as important because you need to know the exact money you have and the amount you’ll be needing. However, as you keep thinking about the money you need for retirement, also bear in mind what exactly your retirement plans will be.