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6 Critical Things To Consider To Make A Foolproof Retirement Plan

6 Critical Things to Consider to Make a Foolproof Retirement Plan

Not everyone has the same idea of what “retirement” should entail. One person might dream of taking cruises around the world and visiting all the places from his bucket list, while another might prefer to spend retirement lounging around the house and catching up on his or her reading. A big part of planning out your retirement savings is deciding just what you want and need to spend your money on.

1. What you’ll do in retirement

If you’ve never thought about what you plan to do during your retirement years, now’s the time. You don’t have to make out a list of specific activities, just consider more or less what you want to do. Travel? Volunteer in your community? Family activities? Go back to school? There are tons of possibilities, each of which comes with its own price tag. Having a sense of what you’d like to do in retirement will help you to get an idea of how expensive your retirement will be, which in turn will help you to draw up a realistic saving plan.

Woman relaxing on the beach
Image source: Getty images.

2. Where you’ll live

The options for retirement living are endless. Some retirees grab an RV and hit the road. Others find a retirement community in a low-cost area and settle down. Still others move to be as close as possible to friends or family. And some settle right down in their current homes for the long haul. The day you retire is not the time to decide where you’re going to go; this is a decision you should make at least a couple of years in advance. That will give you time not only to research and visit the place you’re considering, but also to put together a realistic budget based on your chosen destination.

3. Health considerations

Once you hit age 65 you’ll be eligible for Medicare, but that won’t necessarily end your healthcare financial concerns. For one thing, Medicare isn’t exactly perfect; just consider the dreaded “donut hole,” the period between where basic drug coverage runs out and catastrophic drug coverage kicks in. If you have a lot of prescriptions, which is increasingly likely as you age, you could end up with an impressive drug bill at the end of every year. And Medicare does little to help cover long-term care costs, since these are technically not considered medical expenses. It’s important to set aside extra money in your retirement savings just for medical and long-term care expenses; how much you’ll need to set aside will depend on your state of health, your…

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