Living The Dream Or Counting Every Penny: What Will Your Retirement Look Like?

What do you want your life to look like in retirement? Do you picture yourself retiring to the coast or the countryside? Reconnecting with your spouse whilst vacationing or taking a cruise? Or picking back up some hobbies like gardening or golf? 

Sounds great, but whilst you might have the dream, have you thought about how you will pay for it in reality? 

According to a recent study, one-third of American adults have no retirement savings at all, with many choosing to stick their head in the sand and spend today rather than save for tomorrow.

Picture The Life You Want

The first step to a stress-free retirement is to take the time to sit down and think about what you would actually like your life in your later years to look like. Some key things to think about might be what age you'd like to retire at, where you'd like to live, what little luxuries you would like to have. 

Next (and one of the most important steps) is to realistically work out what it may cost you - there are many calculators available online to help with this process, and it's a very valuable exercise: many people either vastly over or under-estimate how much retirement may cost them. 

Remember, it's difficult to start planning if you don't know what goals you are aiming for!

Make Changes Now!

Obviously, the older you are when you start, the less time you have to save. In an ideal world, everyone would start to save for retirement when they first start earning - the compound interest effect means that you will build up a much bigger pot this way, but few people actually start then. 

The main thing is that you start now, whatever age you are at - you are only going to get older, and starting to save for retirement at age 45 is better than starting at age 50! Look at any little ways you can save like bringing lunch from home instead of buying it when you're at work, or foregoing your daily latte habit, and put the cash straight into your savings pot. 

Another great way to save is to have a small amount paid straight from your paycheck into a savings account - if you can only manage 2% to begin with then start with that, but commit to growing it on your next pay increase, that way you'll get the benefit of more money going into your savings without feeling like you're paying more into it. 

Make sure to take advantage of any employer contribution for your 401K too - many will match what you put in, and that's free money!

Insured For Life?

One thing to think about is investing in a life insurance product - not just from your own point of view (many policies pay out early in cases of terminal illness), but also for what you might want to leave behind for any family members in the event of your early death. 

Life insurance can be quite complicated - how much you want, whether you want whole, universal or term life coverage, if critical illness cover is included etc, so it's important to use reputable sources to do your research, or use an trusted independent advisor.

Start Today!

Retirement planning can be confusing and stressful, but don't put it off another day - make the first move today and take it step-by step. 

Think about key things like the lifestyle you want, how much money you need to achieve it and life insurance, and either do your own thorough research or consult an independent financial advisor to talk you through it all.