How to Set Goals That Will Lead to a Happy Retirement
Many people don’t plan their savings for any more than a couple of months out. As such, they often feel lost when it comes to setting goals for retirement. People planning their retirement should ask themselves plenty of specific questions about what they want from retirement. The goals that they have should then arise from the answer to those questions. If this is where you’re at in your retirement planning, you might find the following questions helpful.
How Much Do I Need to Save?
The answer to this question isn’t straightforward. It’s also different for each person who asks it. That said, the question should produce a specific answer such as, “I’d like a million dollars in my retirement fund by the time I reach sixty-five.” Nerd Wallet gives people some suggestions that will help them find the answer to their retirement question.
To start with, you need to know how much your expenses are. You also need to know how much income you need to survive during the years after you retire. Finally, you need to write down your retirement plan. Using a retirement calculator can help you make sense of these numbers. Your calculations may not be perfect, but they will allow you to have a conversation with a financial advisor.
How Do I Choose a Financial Advisor?
When choosing a financial advisor, there are a few things you should consider doing. First off you should avoid going with a financial advisor who cold calls you. Competent financial advisors attract clientele. Second, your financial advisor should make money by fees not commissions. He/she should tell you upfront how much his/ her services cost.
And if you find out that this person is commission-based get a different advisor. As one customer of State Bank of Cross Plains put it, a financial advisor makes decisions that the average person finds difficult to make. You don’t want someone making decisions about your money based on how much money he/she will make off of you.
Lastly, a financial advisor should contact you regularly, whether the news is good or bad. If you haven’t heard from your financial advisor in a while, it’s time for a new one.
Where Do I Start?
Getting out of debt is a good place to begin, according to well-known financial advisor, Dave Ramsey. In his book, “The Total Money Makeover” Ramsey points out that debt eats up the biggest part of your money-making machine. That is to say, debt eats up your income. He further suggests that once you get out of debt, stay out of debt. Instead, plan on putting the money you would have spent on debt into your retirement accounts.
How Do I Keep Going?
Life isn’t meant to be all work and no play. Even Ramsey, who tends to be more conservative than some financial advisors in his approach, suggests that people save up to have fun (provided they’re out of debt.) Having something to look forward to makes the sacrifices easier to manage. It’s okay to have fun as you move through the years toward retirement. Just plan for it.
Planning for retirement requires you to plan your savings and investing over a long period of time. It’s wise to take a look at all of your expenses as well as to be honest with yourself about how much you’ll need to survive during your retirement years. Talking with a financial advisor can help. It’s also helpful to try and get completely out of debt. Finally, retirement planning in some respects should be a journey and not a destination. It’s okay to have fun along the way.