Key Foundations for a Successful Retirement
It is important to have a plan before entering any new stage in life, and retirement is no different. While you have likely been saving for years, there are a few steps you should take before making the transition. Look at your income and spending to set a realistic budget for your future financial habits. And while you can’t predict the future, having a plan in place for any unexpected events could save you in the long run. Here are 3 tips to ensure that your retirement will be off to a great start.
Create a budget
Once you decide to start the transition into retirement, you will likely be on a fixed income. Creating a budget that enables you to stay on track with your spending is an important step to take before heading into this new stage. To begin planning your budget, try to track spending and income for a few months before you retire. Tracking your normal spending will leave you with an idea of what your budget will look like.
Your budget should have three main categories. First up is the amount of money that is coming in. Remember to include IRA and 401k accounts, social security benefits, and any other funds that will provide income in retirement. The next category is the amount of money you will be spending in the time period you have chosen. If you are creating a monthly budget, how much cash do you expect to spend in any given month after you retire? Be sure to be truthful in your estimations to avoid any unexpected hiccups in the budget. The last category to include in budget planning is debt. Continuing to pay down credit cards, loans, and otherwise is important in any stage of life, so working it into your budget will help you stay on top of payments.
Prepare for the unexpected
Having a plan prepared before an unexpected event occurs can help alleviate many of the stresses that you may face. Whether a big storm takes out part of your roof or a loved one needs help dealing with an illness, having a plan in place is a smart step in retirement planning. One idea is to have an emergency fund in place to help pay for unexpected expenses. Being armed with a plan will give you peace of mind before retiring.
Continue to grow your circle
One of the greatest parts about retiring is the increased amount of time you have to spend with friends and family. With more time for yourself, you can visit your loved ones more often or spend time making new connections. Many retirees spend their time giving back to an organization in their community. Volunteering may lead to meeting people in your area with similar interests and will enable you to grow your social circle even more. If you are concerned about losing touch with workplace friends, plan a day each month to meet up with your former coworkers. Transitioning into retirement does not mean having to leave social circles behind, rather, it will allow you to spend more time making valuable connections with time you may not have had before retirement.
Following these 3 tips is a great start in preparing for retirement, but you can’t stop there. Setting goals for retirement and talking to friends and family about your future can help alleviate stresses that come with any big transition. Taking time to sit down and get an idea of what your retirement will look like is key to a successful retirement.