Retirement looks different for everyone—and it often isn’t what you expect. It’s an entire chapter of your life that you need to prepare for financially; it isn’t as simple as leaving work. It’s common for people to put off retirement planning simply because they’re young. But that could only lead to stress and financial problems down the road.
When you are thinking of retiring, it is ideal to start young however it can’t go as expected. This article will provide you with the reality of retirement to help you plan yours better.
Facts About Retirement You Need to Know
Before planning your retirement, it’s helpful to get a realistic picture of what it’s like.
- Some retire earlier than they expect
According to Morningstar, people retire four years earlier than expected. However, the average retirement age is also increasing, from 59 to 62.
- People underestimate how much they need to retire
Retiring earlier may be a goal for many, but it could also mean increasing how much one needs to save. People who are realistically retiring earlier than expected may need to adjust their retirement plan and saving strategies.
Morningstar found that the average person may need 25% more savings for their retirement than expected if they want to retire by 65.
- Some people continue to work during retirement
As oxymoronic as it sounds, Pew Research Center reported that an estimated 12% of retirees continue working either part or full time. You’ll need to create a realistic retirement plan to enjoy your retirement without needing to work.
How to Plan for Retirement
Now that you have a clearer idea of what retirement might be like, below are a few ways to help you plan for your own retirement.
- Understand what’s realistic for you
Your retirement plan needs to fit your current income, age, and when you can realistically retire. A realistic retirement plan can help you avoid frustration and disappointment.
- Stay healthy
Retirement planning isn’t always about your finances. Develop healthy habits such as staying active or eating well to prepare for this season of your life.
- Practice good financial habits along the way
Early retirement is more common than many think, so be prepared. Have a retirement checklist to help you be aware and accountable for your retirement plan.
Planning for retirement is like planting a tree. The reality of retirement may not always align with a person’s expectations. But, it’s essential to keep learning and opening your mind to what it could be like. When you understand it more, it helps you avoid financial troubles and frustrations.
Retirement planning can still be challenging for some. A financial advisor can help you create a retirement plan that suits your lifestyle and enables you to achieve your goals.