When you’ve been dreaming about your retirement for decades and it’s finally starting to draw closer, you might feel a mixture of excitement and nervousness. Setting Retirement Goals can feel nerve-wracking sometimes, even if you’re otherwise ready to leave the workforce and enjoy your days relaxing, spending time with family and friends, practicing old hobbies or traveling. Many soon-to-be retirees face serious questions about where they’re going to live, how they’re going to cover healthcare expenses, which of their bucket-list items they can afford to pursue, how much money they’ll need saved overall to get by each year and more. However, there’s no need to worry too much – by setting a few major types of goals and starting to prepare well before retirement, you can eliminate a lot of unknown variables and eventually retire comfortably.
1. Calculate Exactly How Much Money You’ll Need Each Year, and Practice Before You Retire
One of the best things you can do to set retirement goals is to figure out how much you’ll need to live on every year during retirement, and then to try to live on that amount for a few years. This method allows you to tweak the amount as necessary, and it can give you a taste of what retirement budgets are like. Additionally, you’ll know how much longer you’ll have to work to afford to retire.
2. Make Sure You Have Health Insurance and a Support Plan in Place
Because many health insurance plans are provided via employment, it’s important to make sure you know how you plan to pay for healthcare expenses after retirement. Old age can often mean higher medical costs than before, so having some sort of insurance can help mitigate financial damages. Additionally, you may want to figure out who will be your emergency contact, just in case.
3. Pay Off Your Home Mortgage First
Many people who own their own homes decide to pay off their mortgage prior to retiring from the workforce, and for good reason. A mortgage payment is usually a significant part of any monthly budget, and when you’re retired, you’ll be on a fixed income. If you don’t want to risk letting your mortgage eat up too much of your fixed amount of retirement money each month, your best bet is to pay off your mortgage quickly.
4. Decide How Much You’ll Want To Travel and Pursue Bucket-List Items
Every soon-to-be retiree likely has grand plans for travel to exciting locations and other bucket-list items, but there may only be so much that your schedule or budget allow. In order to stick to the budget and not end up disappointed in the moment, start planning your items in order of priority now. Decide which of your bucket-list items are more important to you, and figure out a rough timeframe for each one.
The best way to avoid retiring with uncertainty is to start planning early and setting some defined goals that you want to reach by a certain time. With enough preparation and goal-setting, you can retire knowing you’re well prepared to make the most out of your golden years.