By definition retirement is supposed to be the period of relaxation and rest, the time when you no longer have to undergo the pressures of work in order to ensure your survival when you can do things you didn’t have the time, money or opportunity to do before. Yet all too often, this time is spoiled by worries about money, relocation and deciding on the best way to use time. Primarily these problems are caused not by sudden changes in one’s position, but by lack of planning earlier in life.
Which means that if you want to ensure you retirement is really going to be the golden years of your life, you should start thinking about it long before you reach retirement age – the earlier the better. And we are here to help you out.
#1. Select your Retirement Age Carefully
Basically, choosing the right retirement age is a tradeoff between time and money. Retiring earlier means giving up a certain amount of salary and social security benefits. It also means that your savings will have to last you for a longer period of time. On the contrary, retiring later means that you accumulate more money and are better supported by social security. At the same time you give up the earlier years of your retirement, which are potentially the most rewarding ones because there are many activities you may want to engage in while your health is still keeping up, and you cannot be sure it is going to last well into retirement.
#2. Consider Retiring Abroad
Cheap air travel made the world much smaller than it used to be, which means that relocating overseas is no longer as irrevocable a decision as before and why it is a viable decision today more than ever. There are plenty of countries with well-developed English-speaking communities, often comprised of fellow expats, better ecology, plenty of sunshine throughout the year and, what is most important for retirees with fixed income – lower prices. Just make sure you do your homework and learn the details of expat pensions transfers before you start planning – or, better yet, seek professional help in this matter.
Before making a particular decision, it is also a good idea to get a little bit of practical knowledge – laws, customs and medical care costs of your country of choice, tax considerations, how to prepare for emergencies and so on. Don’t neglect to give the chosen country a test run – go and live there for a couple of months, and you may discover a number of circumstances you’ve never thought of before.
#3. Balanced Financial Planning
One of the most common mistakes in retirement planning is the fact that people tend to grossly over- or underestimate their life expectancy in retirement. As a result, some tend to overspend in the earlier years of retirement only to meet considerable financial problems later on, while others make too optimistic an estimate, retire at an older age and never get to use all their accumulated savings. Finding the right balance is hard, but doing a bit of research and trying to make a more or less informed decision in this respect is going to play a major role in defining your standard of living in retirement.
#4. Easing into Retirement
People who work hard their entire life often find retirement to be not a period of rest and relaxation, but boredom and apathy. The sudden transition from an active lifestyle with daily challenges to overcome and problems to solve to a life that doesn’t require you to do pretty much anything can lead to anxiety, depression and other health risks.
In order to avoid it, make sure you know what you are going to do in retirement. Choose and try out a hobby, try working part-time for a while before retirement, make connections with people outside your work environment. Make sure life isn’t going to become empty once you leave work.
Probably the best way to save for your retirement is to continuously invest a part of your income into something. It is much less difficult than you may believe, and doesn’t even require getting deep knowledge of the subject – just don’t put all your eggs into one basket, and you are going to be alright. Of course, if you want better returns on your investments, you’ll either have to spend a lot of time learning all ins and outs of investment business or find a professional and trustworthy consultant.
#6. Start Early, Plan Ahead
People usually tend to think they have a long way to go toward their retirement. However, a universal piece of advice here, irrespective of whether you are twenty or sixty, is this – if you haven’t started planning now, start immediately. The earlier you start working in this direction, the more opportunities you will have to meet the retirement goals you set for yourself, the fewer corners you will have to cut, the fewer compromises to make. Ensuring your retirement safety is certainly worth spending some time to plan today.
#7. Have a Contingency Plan
As we all know, the best-laid schemes of mice and men are not secure from unexpected circumstances, and it goes double for retirement plans. The older you get, the less opportunities you have to drastically change anything about your life and successfully deal with unforeseen trouble. Therefore, you should plan ahead and still be morally ready to give up your carefully-laid plans in favor of something more realistic. Your job is to make sure you have enough leeway to do so.
You will never be able to prepare for all eventualities, no matter how careful you are. But the earlier you start, the less you leave to chance, the more bases you cover, the less sorry you are going to be when the time to retire comes. Retirement should be the time you can freely enjoy life – not scamper around trying to scrape up enough to get by.
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