“How can you possibly know how much money you will need for retirement, if you don't know what you will be doing?”
Forbes’ article, “The One Piece Missing From Most Retirement Plans” says there’s just one small piece that many people don't think about when crafting their retirement plan. Any guesses what that is? Well, the missing piece is: THEIR RETIREMENT PLAN!
All the calculations are critical, but they aren’t much good without actually thinking about what you plan to do during retirement. There are two reasons why thinking about the final years of your life are crucial. The first is that you can’t possibly know how much money you’ll need for retirement, if you don't know what you’ll be doing, right? There’s a big difference in the money needed to travel around the world versus sitting on the porch knitting sweaters for grandchildren and playing bingo at church.
Next, when you wake up on your first morning of official retirement, you’ll have no responsibilities or plans. How great! But, be honest: how much can you really tend to your garden or catch up on reading? Retirement can be up to 30 years or more. That's a lot of time left to live. Retirees frequently are bored, lonely, or depressed during retirement, because they don't have the routine, social interaction or purpose that they had at work.
Before you begin your retirement calculations, ask yourself these questions:
- Where will I live?
- Do I want to downsize?
- What are my dreams and goals in retirement?
- Do I want to have the flexibility to move near my children?
- Do I want to help my children with their finances?
- Have I adequately considered the rising cost of healthcare?
- Do I have family to help me?
- Will I need to consider living in a retirement home?
- Do I want to work a part-time job to keep busy?
- Do I want to leave my estate to my children or charity?
If you’ve thought about how much money you have and how much money you'll need in retirement, that’s terrific. However, as you’re planning for retirement, remember to think about exactly what you’ll do when you retire.
Reference: Forbes (November 21, 2018) “The One Piece Missing From Most Retirement Plans”