Take a moment and picture your retirement. What do you see? Chances are, you're picturing experiences and emotions - a vacation you've always wanted to take, time spent with children and grandchildren, and the feelings of relaxation and satisfaction now that you can reap the rewards you've earned. You probably also feel a little anxious. What's the best way to get to those experiences, and when should you start planning? How can you be sure you're making the right decisions when it comes to managing your wealth for retirement?
By figuring out the answers to these questions, you can feel more confident making financial decisions for your retirement - and ultimately creating the future you envision for yourself. You can look at your retirement as a lifelong process. It doesn't start a few years before you're thinking of leaving your job. It starts at the beginning of your career and continues as you accumulate assets, increase earnings, develop and adjust investment strategies, and form an idea of how you'd like to retire.
Remember, planning for retirement is about figuring out what you want out of life and then taking the steps you need to get there.
Early in Your Career
You're most likely not thinking about retiring just yet - but it's not a bad idea to start early. Some questions you'll want to consider at this point:
- What investment options are smartest for my current career stage?
- In what ways can I accumulate assets to work toward building my wealth?
- How long do I expect to be in the workforce? When, ideally, might I wish to retire?
Midway through Your Career
Retirement is on the horizon, and you're probably starting to consider your personal and family needs down the road. It's wise to ask yourself:
- Who might figure prominently in my retirement? Family? Friends?
- What big goals do I want to achieve during retirement? Pay for a grandchild's college education? Buy that vacation home in France?
- Where would I like to live when I retire? Should I stay near family and friends or move someplace different?
Late in Your Career
You're on the cusp of retiring, and the years of careful planning are close to paying off. At this stage, you'll want to make sure you address these types of questions:
- Are there any circumstances - health issues, inheritance - that were unforeseen earlier in my career and that might affect my retirement plan?
- What does the healthcare picture look like in the near future? Does my current plan take into account possible changes to healthcare laws?
- What will I do to fill my days when I'm no longer working? What activities might I like to try?
Now that you've made it to the final stage in your career - retirement - you are able to enjoy the results of all your diligent planning. You'll still have questions, though, and these might be along the lines of:
- How do I age successfully? What are the best ways for me to be healthy and happy?
- Am I balancing my income and spending so I can continue to live my lifestyle?
- Is my current plan working for me, or do I want to change it? Am I still happy 1, 5, 10 years into retirement?