For many, thoughts about retirement bring with them images about living the easy life and taking part in favorite activities. Financial independence helps deliver that outcome, and such freedom doesn’t come easy without retirement planning. Traditional ideas about saving and investing still have merit, but persons thinking about the future might need to “tweak” traditional approaches. The world long ago entered a “new normal,” so some adjustments may become necessary.
Following the Basics and Looking at Changes
Again, fundamental aspects of intelligent retirement planning could help someone regardless of changes in the retirement landscape. Ultimately, retirement planning involves maximizing net worth and assets while cutting down on debt. Eliminating unnecessary spending might be a top priority for anyone who wants to maximize savings and put money to work. Wasting $1,000 a year by not using coupons or buying things on sale adds up. 20 years means $20,000, if not more. Investing $1,000 at a 4% annual return turns into $2,191 by the end of the 20 years. And then, there are things to consider when looking at changes in retirement planning. Many people look to leave the United States and become expats in countries where their retirement savings carry them much more. Moving to a country with an incredibly low cost of living could offset the normal progression of inflation. Perhaps now is the time to examine trends in retirement relocations. Generally, those who plan early for retirement and explore safe strategies for financial freedom could discover more options available to them. Unfortunately, things may occur unexpectedly and upend plans. The COVID-19 pandemic, for example, likely led many retirees to put off moving to a new country. Regardless, the pandemic may serve as an impetus to prepare for unexpected scenarios.
Planning the Road to Retirement
Maximizing contributions to individual retirement accounts could be wise in the years before retiring. What about those persons who retire and take a second job for a few years? Maybe taking the minimum mandatory IRA distribution makes sense if the investments continue to do well. Taking a closer look at investment risk might prove necessary. The world’s economy isn’t always stable, and sometimes putting funds into safer investments seems best for some. Each individual’s situation is different, so the percentage of savings directed to conservative and more aggressive investment vehicles will also vary. Careful planning could increase the chances money goes where it works best. And what about medical planning? Persons moving out of the country may need to think beyond Medicare and look into additional coverage options. Not having adequate medical insurance in place could devastate net worth if an emergency happens. On a side note, placing greater emphasis on wellness might cut down on health problems. Obesity contributes to many avoidable conditions, so why not make eating healthier and losing weight part of retirement planning? It is never too late to plan for retirement, but problems may derive from waiting too long. In a landscape rapidly moving to a new normal, earlier and more precise planning may become necessary. Why delay?
Brought to you by Jessica Williams