How to Get Serious About Retirement Planning

Written by , December 6, 2012

How to Get Serious About Retirement PlanningUnlike saving up for a down payment on a new home, or saving for your child’s college tuition, retirement planning is something you’ll do for virtually your entire life. Having a long term outlook is a matter of necessity; it would be virtually impossible to save enough in just a decade or two to fully fund your retirement.

But despite the important nature of retirement planning, not everyone takes it as seriously as they should. For whatever reason, too many individuals either start saving too late or don’t save enough each year. Even worse, some individuals simply haven’t started their retirement savings at all.

Here is some advice for getting serious about your retirement planning.

  • Understand Your Situation. Before you can get serious about your own retirement planning, you need to have a full understanding of your current situation. This means you need to take stock of your finances in terms of all your assets and all your liabilities. Doing a net worth analysis is one of the best ways to learn how much flexibility you currently have to dedicate towards your retirement planning or, if you’re currently not in good financial shape, what the problem areas are.
  • Identify Your Goals. In order to come up with a retirement plan, you need to know what your goals are. Nearly everyone wants a “comfortable retirement,” but there is a wide range of views on what exactly that means. Some individuals are going to want a lavish and luxurious retirement lifestyle, while others are going to opt for a simpler lifestyle. Clearly these two options (and all those in between) are going to require different amounts of retirement savings. Identify what you want so that you can plan accordingly.
  • Pay Attention to Your Health. Since the largest single expense for most retirees is their ongoing healthcare needs, a major part of your retirement plan should be to minimize those costs. While you don’t have much control over how much your health insurance is going to cost, you do have a great deal of control over your health now. Lead a healthy lifestyle to improve the success of your retirement planning.
  • Come Up With a Plan. The surest path to failure in retirement planning isn’t having the wrong plan; it’s having no plan at all. Even a less than ideal plan is going to help you develop saving and investing habits. It’s easier to modify and adjust those habits once you have a retirement plan in place than it is to develop the habits in the first place.
  • Adjust Your Plan as Appropriate. As noted above, once you have a plan in place you’ll be able to modify and adjust it to make sure that you’re always doing the most you can to save for retirement. Developments in the marketplace, as well as changes to your own risk tolerance and investing needs will drive these changes. Many retirement savers find it helpful to identify trusted sources of information that they can use to decide upon the best approach.
  • Throughout the entire process, make sure your retirement plan is tailored to your individual needs and goals – that’ll make it easier for you to still to the plan.

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