Since it’s impossible to know exactly how many years you will need to support yourself, planning for retirement is quite a daunting and varied task as it’s difficult to plan exactly how much you’ll need. Setting out a general idea of what expenses you will likely have can help you set realistic goals to help you achieve a comfortable retirement. Here are some considerations to take when trying to decide what you’ll need:
How Lavish a Lifestyle You Want
What you want your life in retirement to look like will have a big impact on how much money you’ll need to have stored up. If you’re planning on doing a lot of travelling on luxury cruises or in five star hotels then you’ll need to set your savings targets higher. If you’re hoping to have a quiet life living near family in a modest house then you probably won’t need as much. It all depends on what comfortable means to you and how expensive reaching your comfort levels will be.
What Debt/Assets You Have
Ideally, as you near retirement age your debts will have been paid off and your assets will have grown. Not having too many expenses weighing your wallet down will help decrease the amount of money you need every year in order to live a comfortable life. As your kids grow up and move out and you finally manage to pay off that mortgage you’ll start to see just what you need to live on without the additional expenses.
If you have a big family that you hope to spoil or continue to support during your retirement then you’ll need to make sure you’ve planned to save enough. If you want to help your grand-kids buy their first car or pay for their college tuition make sure it won’t impact your ability to live out the rest of your years in comfort.
Your Health and Your Care
Health problems usually hit unexpectedly, but as you get older the more likely you are to run into them. Knowing your family’s health history or knowing the cost of any current chronic conditions can help you plan for any future costs. In addition, the older you get the more likely it is that you will need some help taking care of yourself, and if you don’t live near family who would be willing to take care of you then chances are you’ll have to pay people to help you. Whether it’s in-home care, moving to a nursing home, or just having someone to run errands for you a couple times a week, you definitely will want to make sure you have enough saved so you don’t have to stress about your care.