Life gets in the way. Work, family, vacations, out-of-town guests and a tight social schedule can all make it easy to put retirement planning on the back burner. It's important to remember, however, that retirement planning is an ongoing and evolving process that requires frequent attention.
Life also presents us with a constant flow of change -- job loss or change, marriage, additional children, divorce, housing change or loss of a loved one. With each change, retirement planning requires a fresh and new look.
Make an appointment to meet with your financial advisor to re-evaluate and re-adjust your retirement plan to match your current economic and personal situation. Before the recession, a review every three to five years was sufficient. These days, it's wise to keep your retirement plans on track by reviewing your plan at least yearly. If a big change in your personal circumstances occurs, don't wait for your yearly review. Do it immediately to keep yourself on track.
The years fly by quicker than you think, so start anticipating tomorrow's needs today. Decide how much money you'll need to maintain the lifestyle you want or enjoy for 20 to 30 years beyond your planned retirement age, and then determine how much you'll need to save monthly in order to be there when the time comes. Keep in mind that the value of your dollars typically decline with inflation, so you'll need to figure this into your calculations. You'll be glad you took the time to do the math when the time comes to depend on those numbers.
Take advantage of your employer-sponsored retirement plan by contributing as much as you can. The amount your employer contributes will help grow your equity faster. If you're 50 or older, let the "catch up" rules work for you by increasing the amount of your contribution. It's smart to use every opportunity possible to increase your future net value.
Once you've retired, you'll have benefits available from different sources. It's important that you know what these benefits are now so you can maximize the return from them later. Look into the type of benefits you're entitled to from pension plans of both current and past employers. Review your annual Social Security benefit statement for accuracy, as well. Yes, research takes time, but as they say, time is money -- in your pocket! Keep in mind there are rules about when you have to apply for Medicare benefits.
There's no way to know what hand life will deal us. The best bet is to prepare for the unexpected so all your bases are covered. Long-term care costs like nursing homes and assisted living may or may not be covered by Medicare, health insurance or disability insurance. Do research on long-term care insurance and determine whether your particular situation merits investment in a policy. Hopefully, you'll never need to use it, but if you do, you'll be glad you have it.
You need to indulge yourself every once in a while, so keep some money in your budget for frivolous spending (and keep a regular savings account that contains money for a rainy day). But keep your eye on the future too. Make a few sacrifices today (like skipping that expensive dessert and stopping at the drive-through for a shake instead) and you'll be rewarded with a more comfortable retirement.
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