May 25, 2024
SOLOBIS

6 Retirement Planning Checklists to Follow in 2022

If you decide to consult a financial advisor, the chances are pretty high that the conversation will mostly cover topics relating to your current financial situation. For example, they may ask you about your spending habits, the debts you owe, and your budgeting skills.

While these are essential aspects that need to be discussed to lay the foundation necessary for financial planning, the conversation will eventually steer towards the more critical question of making your retirement plan work.

It determines how ingeniously a person can develop a retirement goal and how efficiently they can follow it year after year. It eventually comes down to five numbers, and all one needs to do is determine them by putting in some effort.

6 Retirement Planning Checklists

A scratchpad and calculator are possibly the only things you will need to carry out the calculations.

It would be best if you did these things in the company of your partner or spouse, who can help you exercise your memory and help you arrive at correct assumptions about your future and that of your family.

#1. Getting Realistic about Goals

Most people have a number in their heads about the age they wish to retire. But most often, they end up pushing the target indefinitely because they cannot meet their target goal.

It may be due to the degradation of health or the fact that their organization is downsizing, or maybe you changed your career later in life, leading to an increase in income or a loss of it.

You should rationally decide on a number and ensure that you save enough to meet your goal in a reasonable number of years.

#2. Estimate Your Retirement Income

You may have taken out insurance policies that will pay out a lump sum of money in retirement. These are sources of money that you can count on in retirement to help you set up your retirement fund.

In addition, making suitable investments will help you generate steady income and further add to your retirement pot. Finally, working part-time in retirement should also help you increase your revenue.

#3. Figure Out Expenses

Once you have a fair understanding of how much money you can save for your retirement, you should also calculate the expenses you may incur in your retirement.

For example, will you still be paying the mortgage in your retirement? How much does a will cost, and how will you arrange travel, food, insurance, and healthcare costs?

The expenses that you initially calculate will be lower than the amount you will spend, and therefore it may be a good idea to cut costs from the very beginning.

#4. Take the Unexpected into Account

Even the best-laid plans sometimes meet with unexpected elements producing an outcome that you hadn’t anticipated. Therefore, you should always consider the possibility of things going wrong, even if it is something as unpredictable as a storm wreaking havoc on your property.

For example, when you are living on a fixed income, you may end up overspending in the first few years, which can drastically impact your ability to further add to your retirement fund later on.

#5. Consider Longevity

According to your estimates, how long do you believe your retirement fund will last you? Have you considered the sweet possibility that you may live longer than you think you would?

An aspect that you may have overlooked is inflation. It can severely affect your spending power and decline over the years. However, creating a good investment portfolio can balance things out and protect you from long-term problems.

#6. Clear Debts Before Retirement

It would be best if you made it a point to clear your debts before you start your retirement. This is because your income will likely reduce in retirement, and still having debt in those times will make it harder for you to lead the type of lifestyle you had initially planned for.

Many people spend the lump sum of cash that they receive in retirement to clear debts such as loans or mortgages.

Unfortunately, this can bring down the worth of your retirement fund, and you shouldn’t count on this lump sum of cash to clear your debts as it will ultimately increase the indebtedness due to the accumulation of interest.

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