With costs on the rise due to inflation and people sometimes feeling pinched, it can be tough to think about saving for bigger picture goals and planning ahead. However, it’s crucial to keep an eye toward the future and continue to save – even during more challenging economic times. The key to staying on track is thinking through your retirement wants and needs so that you can chart your course of action.
Here are five tips to help you create your roadmap.
Take Stock of Your Priorities
It’s important to take a moment and consider what you want out of your retirement. This is the part of the planning process where you consider all the top priorities in your life. Think about short-term goals, like buying a new car or taking an international trip, mid-term goals, such as contributing to your grandkid’s college education – and don’t forget long-term goals. This might include having enough money to leave your kids and grandkids with money for their future. These goals all represent different destinations along your retirement roadmap. It also helps to have an estimated retirement age in mind.
The point of this exercise is to help you approach each goal with a critical lens – what does a successful retirement look like to you and what is the cost? By looking at your list of goals you can more easily focus your time, energy and money on the things that are most important.
Assess Your Finances
Once you have a better idea of your retirement goals, it’s time to assess where you stand financially and understand your future retirement spending needs.
Your retirement savings plan will largely be driven by how much you’ve saved thus far and how much you can save going forward. This includes assets, income and investments. Your investments may include equity in a home, Social Security benefits, individual retirement plan investments, savings accounts and more. To help give you an estimate of how much money you’ll need to retire, try this online Regions calculator.
This step is particularly important in today’s environment. Taking the time to closely review your finances will help you to be more aware of where your money is going and any adjustments that need to be made. For example, you may find that you’re able to save less than you had previously because that money is now going to the increased costs for necessities. Just remember, even saving a little bit each month or from each paycheck for your retirement will add up over time.
Anticipate Bumps and Forks in the Road
Keep in mind when planning for retirement that there will be unexpected events or changes in your plans. This can include anything from a new marriage, divorce, death of a loved one or unexpected illness.
It’s also important not to overlook potential economic shifts like inflation. As we’ve seen this year, the cost of goods and services will go up, so make sure to account for this in the planning process.
Keep in mind, financial priorities look different for everyone and may continue to shift throughout the years. The best thing you can do is anticipate that your plan will change – no matter how early you begin the process!
Work with a Professional
Working with a wealth advisor or financial professional is another great way to get a better idea of where you currently stand and what your long-term financial picture might look like. Financial professionals can help you factor in things like expenses, unexpected costs and life events, and how market performance could impact your future. They can also help you make adjustments and get back on course when unexpected events occur along the way.
Don’t Forget to Enjoy the Present
As you think about retirement, it’s important to keep in mind that planning for the future shouldn’t take away from enjoying the present when you can. A good retirement plan balances a fulfilling lifestyle now with progress towards milestones in the years ahead. Starting the process early, evaluating your goals and keeping stock of your finances are all key steps that will help you on the road to retirement.
If you’re looking to learn more about planning for retirement, check out Next Step’s Retirement Savings and Planning Resource Center.
Regions Next Step. Advice, guidance and tools to help you break down any financial goal into manageable and achievable steps and inspire you to be proactive in pursuing your goals and dreams.
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