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So your thinking of retirement maybe now, in a few years or many years. there are many things to consider here are the top 5 things to consider for your retirement planning.
1) How Much Money will I need?
Retirement planning is going to be different for everyone depending on your situation. How much money have you saved, how much debt do you have? will your house be paid off, will your car(s) be paid off. What do you plan on doing? These are all things to consider if you’re still years away from retiring you need to figure all these questions out and have a plan to save and pay off any debts you have.
An article just the other day indicated in the US the Social Security Fund will be depleted by 2034 at current rates. this means that younger people can expect less in retirement. If you’re under 50 you need a better plan than relying on Social Security.
It’s why I always stress having a second hose filling the pool, never rely on one source of income. If you make boatloads of money make sure you save it. If you don’t, like most of us you need to supplement your income. I have other posts on how to do this but you need to find a way to find more to save and pay off debts if you have them.
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2) Will You Have Kids School to Pay For?
If you have kids will you be paying for their post-secondary schooling? In Canada right now you can expect to pay at least 20K a year if your child goes away for school. In the United States, it can be double that 40K-60K depending on the division and location. Multiply that by 4 years and if they decide to go to postgraduate school keep adding…
Point is if you are paying or supplementing post education for your kids you need to plan for those expenses that could very well last into your retirement. Will you have enough to pay for it and still enjoy retirement?
3) What are you going to do?
A colleague of mine told me a few weeks ago. She owns a retirement property in Central America, “you can only golf so much“.
Retirement Planning is just that you need a plan! If your plan is to golf everyday you better think again that’s only 4-5 hours of your day. You’re going to need to fill the day out. So what are your hobbies? Can or would you like to volunteer? can you do consulting work? or perhaps start a small business.
This is hard to fathom if you are a long way away from retirement but it’s important to consider, so many start their retirement without a plan and sadly their health declines quickly. You will need to keep busy, exercise, watch over grandkids, and maintain a healthy lifestyle.
For myself, I’ve decided to start this blog after considering all the different things I’d like to do when I’m retired. I’ve decided to see where this can take me and when I retire I will be able to continue with it thus keeping me busy. Plus my perspective will be different as right now I’m writing about what you need to think about when your thinking of the retirement stage in your life (it could be a long time if your lucky and stay healthy). Maybe it will work maybe not (I hope it will) but it’s important to find ways to be productive and keep learning.
If you’re at all interested in doing the same the folks at Create and Go have been a fantastic resource for me. Its been a really fun hobby. I personally used and purchased these courses and highly recommend them for anyone considering starting a Blog. Alex and Lauren have made all the mistakes and are now passing their experience in Blogging along so we don’t have to make the same mistakes.
Disclosure: this is an affiliate link, there is no extra cost to you if you decide to purchase their courses
4) Where are you going to Live?
It’s a tough question as well. I really want to escape our brutal winters -40 Celsius is crazy cold and our winter is long. Our house is small enough that I would consider keeping it and then either renting or purchasing a place where the weather is more tolerable in the winter. Renting or Purchasing???? that’s another blog post.
There are many people with large homes, so then the question is do you downsize or get a condo (don’t forget condo fees) If you have kids that have moved out do you still need the 4-5 bedroom house? My in-laws have just downsized from a 5 bedroom to a 3 bedroom. When you’re doing so, you have to consider the cost to move, (legal costs, closing costs, land transfer fees, realtor costs) remember just because the value of your home has gone up the house you’re going to buy has probably increased in value as well.
If you can move a little bit out of town and buy a cheaper house and take the money you save and use it for retirement fun. Personally, I want to be downtown in the hustle and bustle but I’m more of a city slicker than a country boy.
Maybe renting makes sense at that point in your life as house prices are skyrocketing in major city centers in Canada.
If you are looking spending time where the weather is more favorable, how are you going to do it? where are you going to go? the best part of retirement is you’ll have the freedom to figure that out find a place you really like and spend more time there on a regular basis or just keep renting at various locations and intervals.
5) Caring for family
Retirement planning and making sure you include family members that are aging and may need your physical or financial assistance is always a hot issue. In my family, my wife’s great aunt is still going strong at 100 years old. Up until a year ago, she was living with my in-laws. This had a serious impact on their retirement. It was difficult to go away for any long periods of time because they were the primary caregivers for the great aunt.
My father-in-law wanted to teach chemistry in India when he retired, obviously, that didn’t happen and I feel bad that he didn’t get the chance. I respect the notion of family first but you are only on this planet once unless you are a Buddhist, you have to plan for these realities.
It can be very expensive. If a family member needs to be in home for better care, on average the cost is approx $5000 per month and its extra for baths, cleaning clothes, and medication delivery etc. so you can see that if your family is not prepared for these costs it could very well eat into your retirement savings and fast.
People are going to live longer. I mention this in another post here, but with all the advances in medicine and science, its very likely you and your loved ones will live longer potentially meaning you’ll need more money will need to meet this extend the time you plan to be alive. Weird but true
Conclusion
What you plan for and what you are actually able to do are two very different things. The more financially prepared you are the better, so consider a second job or side hustle you’ll fill the pool faster with two or three hoses than just one.
If you like the blog and are interested in starting your own, I highly recommend it, it has been so fun and rewarding. I highly recommend Alex and Lauren’s courses over at Create and Go.
They have made the mistakes so we don’t have to repeat them, they’re honest and straightforward so that anyone can do it. It is an affiliate link but there is no extra cost to you. See the resources Page if you need advice on other products as well.
As always, if you have any questions don’t hesitate to contact me at theteam@wickedretirement.com
Until next time
