Whether you are close to retirement or still have many years ahead of you, having a retirement plan is a must. One day, each of us will either be unable to work, or won’t want to work anymore, and don’t let that be the day you start thinking about a retirement plan! There’s a lot to think about and consider more than just saving up.

Saving for retirement is a critical part of any young professional’s long-term plans, and it should be a priority. It shouldn’t be something that you take lightly and not worry about. Maybe you already know that you’re doing enough, and if so, that’s great but you should really think about what you want to be doing, how much it’s going to cost, what details need ironing out to achieve it and how you’re going to achieve it.

Retirement is definitely going to be an exciting time in your life but it is also a big change and a big expense. If you do find yourself short, start course correcting now and re-evaluate your plan. By making sure you have a good solid plan in place you’re helping to secure the retirement you are dreaming of, have a look at these basic retirement essentials that you should be considering.  

Budget

For retirement, you’re going to need to know how much you’re going to need per month to live off of. Having just an estimate may be good for now as a young professional, but the closer you get to it, the more exact you’ll need to be.  Make sure that when you are doing your figuring out that you factor in inflation, it can be calculated at about 3%-5% per year.

The best way to begin a retirement budget is to look at the amount you’re currently spending as a non-retiree and if you are looking at a while until you retire then it’s a good idea to look at what other people of that age are currently spending. It’s a good idea to look over your utility bills, bank statements and credit card statements over around a 12 month period and then look at how much you’re spending on things like eating out, groceries, car expenses and days out. Although these areas may change dramatically in retirement, having an idea of what normal feels like before retirement is a good place to start.

Create A Basic Plan

This might seem like a really simple point to make however, there is an awful lot of people that don’t do this. You should be thinking about things such as what age you want to retire, how much you need to save in order to live a comfortable ‘normal’ life and it’s definitely something that you will want to come back to more than once. You can’t just sit there at the age of 30 and write a plan that’s set in stone, there’s a lot of factors to consider that are open to environmental changes. You will also need to think about living arrangements. Are you going to stay at home, live with family or maybe retire in a luxury village such as Yukana? Often as we age and grow our needs and wants change too. So the perfect plan for you now might not be the case in ten years time. It’s a good idea to think about saving larger amounts as you get nearer to the date of retirement to accommodate any changes.

Income

It’s important to be looking at aspects of your plan such as the income you can expect to receive throughout your retirement. Start by looking at the sources of income you are going to have to come in on a weekly, monthly and annual basis including things like pension and social security. It’s best to make sure that you don’t spend all your monthly income, keep some to one side for the unexpected costs. Having a drop in the stock market or any sudden medical bills can put a real dampener on your income when retired. It’s advisable that you regularly review your social security options if you’re not already drawing it as it could be costly not to complete essential changes and research.

Retirement Account Balances

You may just have one account dedicated to retirement or you could have several either way it’s good to make sure you’re regularly reviewing them and know what’s going on. If it’s been more than a month since you viewed your pension accounts online account or other retirement accounts, it’s been too long. By making sure you’re on top of things like this you can monitor whether you are paying enough in each year and alter your payments to keep you on track. It’s definitely a better idea to overestimate than undercut yourself.

It’s Never Too Late

Just like it’s never too early to start planning it’s also never too late to start saving. Any time that you’re able to start saving for retirement is good, it means that at least you are able to help fund yourself once you stop working for the lifestyle that you want to keep. You probably won’t be able to catch up completely but saving more will help to bring back some of the lost time. Some people choose to take an extra job or downsize their home to help bring in extra funds for retirement and it’s definitely easier to do this now rather than later.

Get Away From Debt

Now, this can be easier said than done but the sooner you can get out of debt the better off you will be for when retirement does come. You don’t want to be paying off massive debts that you owe long into your retirement age. Getting out of debt earlier in life definitely has it’s advantages, as well as having the funds for the retirement you will also have more funds to do the things you want now such as vacations, new cars and houses updates.  It’s highly important to know exactly how much debt you and have a plan in place to clear it asap.

Do you have any other things you should be considered as part of a retirement plan? Please share them in the comments section below.