When considering your potential for retirement, the best tool you might have at your disposal is a crystal ball. Unfortunately, if you happen to be fresh out of these handy tools, there are a few ways of thinking that might help you plan for a happy as well as financially solvent future. This article will serve as your primer for such a post-working future.
How long will you live? Talk about your ability to see into the future. Unfortunately, without at least a ballpark idea of how long you will live, it will be very difficult to determine how much you will need to live on for the remaining years of your life. If you don’t have a crystal ball and you’re fresh out of palm readers, get an idea by looking at your family tree. No, you don’t need to cut anyone in half and count the rings. Instead, look at as many of them as you can to get an idea. Do they live long and active lives? Chances are good that you will too.
How much money will you need to live in a manner that you wish? Once you decide approximately how long you will live, you will need to determine how much money you will need to have in order to live. By the age of your retirement, you could probably have several assumptions under your belt such as having your home paid off, your children educated, and other givens which can cut the among of money you will need to make down considerably. This is not to say that you won’t need money, perhaps even a considerable amount, but you will probably need less than you did earlier in your life.
What will you need to have and do to make your chosen lifestyle possible? By this point in your homework you should have a rough idea of what you will need to retire. Considering how you would like to live during your retirement, does this mean you can live on what you have saved? Will you need to work more or perhaps at least part time? Are you taking a disability retirement? This brings with it another possible source of income. The point here is to determine what you will need to do to make living in a certain manner possible.
Perhaps this summary of evaluating your potential for retirement could be considered oversimplified, but it will give you an idea of what you will need to retire, comfortably and happily ever after.