Retirement can be viewed either as a form of exile or as a new phase in your life. On one hand, you’re cutting your ties with the world of work and social contribution. On the other hand, you’re embracing a fresh opportunity for personal growth and self-expression.
The difference between a comfortable retirement and a difficult one is your attitude and preparation. If you have a sense of gratitude about getting a chance to pursue your favorite interests, then it can be a time of exhilaration, even fulfillment. If, instead, you regard your pending retirement with a sense of quiet desperation, then you need to develop a plan of action to reassure you have a promising future.
3 Ways to Plan Your Retirement
Here are three ways to plan for a great retirement:
- Insure ahead of time to take care of your funeral costs.
One type of insurance that you should think about getting when you retire is final expense insurance. Unlike life insurance, final expense insurance is a smaller, more specific policy whose purpose is to assist your family with covering costs when you die. Often referred to as burial insurance, this policy takes care of numerous final costs, ranging from a hospital stay to funeral arrangements.
- Decide if it’s still a good idea to downsize.
Downsizing used to be a popular retirement strategy because people relied on the equity of their home to fund their retirement years.
Unfortunately, all this changed after the global financial crisis from 2007 to 2008, which was one of the worst economic tailspins since the Great Depression in the 1930s. It caused a quarter of the homes across the nation to be considered negative equity, meaning homeowners owed more than the houses were worth.
Consequently, the old strategy of selling your large house in a good area and moving to a smaller one in a less expensive neighborhood to fund your retirement isn’t going to work anymore.
It’s necessary better to take a more creative approach. For instance, some retirees renovate their home to rent out rooms. Others with a lot of land convert their backyard into an RV parking lot.
- Plan early enough.
Many Americans who did not start saving early enough for their retirement have not been able to benefit from the miracle of compound interest. Others did not have enough income to start to save anything at all.
If you find yourself with little to no savings, then talk to a certified financial planner. He or she will help you craft a detailed plan so that retirement is less scary. Once you have a plan in place, then things won’t look as bad and you’ll feel positive about your future.
A financial planner will help you evaluate a variety of scenarios. For instance, what will happen if you sell your house and move to an apartment? Or, what can you invest in right now with your current income to acquire passive income? Or, what steps can you take to slash your monthly bills to save money each month?
Once you have a plan, then you can start saving and investing. It doesn’t matter if you must start small. The main thing is that you’re taking constructive action.
Prepare for the Future
Your mission, should you choose to accept it, is to find the guidance and resources you need to plan your retirement well ahead of time. There are plenty of experts who can advise you on how to prepare for your retirement, as well as numerous sources of information on practical retirement strategies.