Different Types of Retirement Plans
The financial aspect of retirement is often discussed, but planning for retirement goes beyond finances. The key question to ask yourself is, "How do I want to spend my time in retirement?" Different types of retirement plans take different types of preparation.
Regardless of how you intend to spend your retirement - whether its relaxing in a condo by the ocean in Florida, traveling the country in an RV or any other pursuit - upfront planning is needed.
- Add up all of your financial resources, such as Social Security and pensions, as well as money in retirement and investment accounts
- Look at the level of monthly income these retirement resources can provide and the timing of when you can draw from these resources
- Determine if there's a gap between the cost of your desired lifestyle and what your resources can support and make adjustments as needed
Buying a Home
Buying a home in another part of the country, whether you pull up stakes and move or purchase a second home, takes planning. So you need to investigate and understand how the cost of living compares to your current situation. This goes beyond just the cost of the home and needs to include the day-to-day cost of living. Things like state and local sales taxes, the relative cost of food and gas and other factors.
Settling in a Foreign Country
According to USA Today, about 400,000 U.S. retirees live outside the U.S. Should you decide to retire in a foreign country, there are a host of things to consider. Certainly medical care is one of them, especially because Medicare may not cover you when outside the United States. Additionally, U.S. citizens sometimes have difficulty opening a local bank account because of the crack down on tax fraud and money laundering. Some foreign banks just don't want to deal with the regulations that go along with dealing with U.S. customers, as noted by The Wall Street Journal.
Retirement planning takes a lot of forms beyond just managing your 401(k). Do the leg work beforehand to be sure you choose the retirement lifestyle that is right for you.