You can visit almost any personal finance website and find an article about the importance of saving for retirement. Most people are told that they should start saving for retirement as soon as possible, and many of us have even been told that we need to save a specific amount of money in order to retire comfortably. While your retirement savings should certainly be a priority, if you only pay attention to your savings, you won’t be properly prepared for retirement.
Retirement living includes more than just having enough money; you also need to determine where you want to live, who you want to be around, if you want to maintain the same lifestyle after retirement, and whether or not you plan to continue to work, as well as consider and plan for your future health. If you keep these five points in mind in addition to establishing healthy finances, you will be better prepared for retirement.
If you want to stay where you are currently living once you retire, then you won’t need to spend as much time considering location. However, even if you want to stay in the same city or town, you might want to downgrade from a large house to an apartment in order to save money. This might be especially true if you bought your current house because you had kids, but your kids no longer live with you.
Many retirees decide that they want to move to a different city or state. This requires careful planning: First, you need to determine what qualities are important to you when choosing where to relocate (such as proximity to family, weather, and access to stores). Then you can research places to live, and hopefully visit them.
Also, remember that you don’t have to retire in the U.S. For example, according to International Living, Panama is the #1 place to retire overseas because of its climate, low cost of living, and relatively easy access to the U.S.
2. Social networks
Are you an introvert or an extrovert? Would you prefer to stay at home reading a book, or do you enjoy going out and meeting friends for coffee? If you are a social person, you might find retirement difficult. Unless you continue to work, you will probably transition from seeing several different people each day, to seeing only a few each day. If you want to continue to interact with others, you will need to make an effort to maintain relationships. Building relationships now can help; get together with friends outside of work on a regular basis. Once you retire, consider joining retirement clubs. The level of interest that you have in socializing with others also might affect the location you decide to retire to: You may find that certain retirement communities offer a lot of possibilities for socializing.
3. Lifestyle choices
Lifestyle can refer to many different aspects of someone’s behavior and habits, and many of these will factor into your retirement planning. These choices will affect where you want to retire, especially if you want to live near other adults who share a similar lifestyle. You also may be very interested in politics, and therefore you might consider becoming more involved in politics when you retire. If you are interested in being more environmentally conscious (or maintaining your current interest in the environment), or you like to volunteer, you can think about how you will do so once you retire. You should also determine how you will continue to prioritize physical exercise (or how you will start.) Many lifestyle decisions involve money, but not all of them do, and creating the lifestyle you want requires retirement planning.
4. Work life
If you enjoy working, or you need the extra money, you may decide to continue working on a part-time or contract basis once you retire. According to Bankrate’s Financial Literacy Poll, 39% of non-retirees said that they plan to work as long as they can because they enjoy work. 32% said they plan to work for as long as possible because they need the money. If you do plan to continue working, you need to determine how much you will work, and how you will do it. You can talk to your boss about continuing on at your current job, or you can consider other options. If you plan not to work at all, you should also consider how that will affect your social interactions.
5. Age and health
The age at which you retire will affect how much you work now, and also, may affect your benefits. If you start receiving benefits earlier than full retirement age, you will receive less, but you will receive your benefits for longer. If you start later, you will receive more for a shorter period of time. This does affect your financial planning, but it also relates to how desperate you are to be done working and retire. If you hate your job and you want to get out, then you might want to retire early.
You also need to factor in your current health, and if you foresee any serious health conditions in the future. Many health issues cannot be predicted, but based on your current health, you may be able to make educated guesses about your health in the future. This will affect your lifestyle and where you want to live, in addition to your wallet.
Saving enough money for retirement is essential, but it isn’t the only thing you should consider when planning for retirement. It takes time to find the right location, build the right social network, and get your lifestyle, work, and health in order. Starting now will help you plan the best possible retirement.