The retirement planning checklist is a list of things that every person should be doing in order to prepare for the future. If you are not currently following these steps, there is no time like the present to get started. The sooner you start taking care of your retirement planning, the less stress and worry you will have when it becomes more difficult later on in life. Here are seven things that everyone should do today:
1. Evaluate your current financial situation
Thinking about retirement can be daunting when you are not prepared financially. Evaluate your income, expenses and debt to see how much money is coming in each month versus how much is going out for necessary items or luxuries. These figures will help illustrate if retirement might be a realistic goal for your current financial situation.
Evaluating what assets you have available also falls under this category. Are you comfortable with what you have saved or do you need to work on getting more money set aside for retirement? This step can be difficult if your assets are not readily accessible, but the sooner that the evaluation is done, the better off retirement planning will go in general.
Evaluating our current financial situation includes finding out how much we spend each month and comparing it to how much income we bring in. This figure indicates whether or not retirement might be a realistic goal given the current situation; however, evaluating an individual’s total net worth may provide additional clues about their ability to retire comfortably.
A critical part of any long-term plan is understanding where you currently stand financially.
2. Have a Lifestyle Plan
Most people plan their lifestyle around their retirement savings. But if you don’t have the money to retire, why not plan your lifestyle around what you can do with that money when it is earned?
This point has been a bit of an “A-ha!” moment for me as I’ve been doing more research. It’s worth taking some time now to think about where we want our lives to be in five or ten years and create a roadmap for how to get there (even if it means scaling back during retirement).
The closer we are able to come up with this vision before retiring, the better off our chances will be at having something meaningful – both financially and personally.
3. Prepare a Budget : Figure Out How Much Money You Need Saved Up For Retirement
Preparing your budget is essential to know how much you need to meet your retirement lifestyle. Knowing how much money you need will help to determine if the retirement lifestyle you’re envisioning is realistic.
One way to go about this process is by multiplying your desired annual income by 25 (since a person’s needs are usually met in retirement with 75% of their pre-retirement salary). So, for example, if someone desires $50,000 per year from retirement sources – they would multiply that number by 25 and it would equal $12.5 million needed before retiring. Some people may feel like more or less than 75% of what they made before retirement could be enough for them during the years following work life but we’ll use this as an example in order to compare numbers across different calculations.
When you prepare your budget, don’t just look at potential income and regular living costs. You should also consider how much you will need for retirement and other expenses that won’t be covered by your job. One way to start planning financially is to make a list of everything you want in retirement, then find out the total cost (including taxes) and identify which sources would allow it.
Figuring out how much you need before retirement is only the first step to set financial goals and find a good way of funding them.
4. Reduce Debts
I know what you’re thinking, is it possible to retire even though I am in debt and I haven’t saved anything for retirement? The answer is YES.
– If you have a mortgage, pay it off as quickly as possible to reduce the principal and interest payments every month. This will free up more money in your monthly budget when combined with other measures like cutting expenses or increasing income.
– Pay down credit card debt by making an extra payment each time one comes due instead of only paying minimum balances on all cards (this may take some time). Keep in mind that this does not apply if you are carrying high rate balance transfer debts such as those from payday loans, but these should be paid off too soon after they are incurred to avoid incurring even higher rates.
– Reduce temptation: Avoid unnecessary shopping if possible and stick to a budget once you have one.
– Start an emergency fund: Put money into savings for unexpected expenses such as car repairs, medical bills or appliance breakdowns. This is better than relying on borrowing from credit cards in emergencies when interest rates are often high and the time to pay off debts can be extended by up to 60 months – which will cost more over time.
Reducing bad debt can be done with some careful planning. It’s easy to get into a cycle of borrowing money on credit cards as an emergency measure and then spending more than you can afford because the interest rates are high which cause people to accumulate bad debt without even realizing it.
5. Increase Super Contributions
As other family commitments and debts reduce you can start to increase your super contributions so you have more funds in retirement. This is a good way to reduce the pressure of having to rely on other sources like credit cards for emergencies and will help you feel more financially secure in retirement.
Superannuation can be used to reduce debt and other financial commitments. This will allow you to create a retirement plan that’s tailored specifically for your needs, without pressure from outside lenders.
You can also increase super contributions as other family commitments or debts decrease over time. You might be under the impression that this would put more of an added strain on your finances, but in reality, it allows you to have control over what types of investments are made with those funds instead of having someone else make these decisions for you.
6. Monitor Your Investments Regularly
You should check your investments regularly to make sure that they are in the right place. This will help you feel more secure because you know what’s going on with your investments and can take necessary measures if need be. You should also monitor any changes made by brokers or fund managers, as well as any fees imposed by those parties, so that no one is able to unfairly profit off of your hard work while jeopardising your retirement plans at the same time.
Regularly monitoring where your funds are invested also enables you to keep track of the types of investments that make up a portfolio.
Investment monitoring will save you from making costly mistakes and can help you avoid expensive errors by alerting you when something is amiss with one particular investment or another. Monitoring allows investors some sense of security while still allowing them enough freedom so that they know what’s happening at all times and feel comfortable.
7. Start now
The best time to start thinking about retirement is now!
If there was ever any doubt about how important retirement planning is, consider this: most people don’t start thinking about retirement until they’re at least 50 years old! That means that retirement planning is something that you should be doing at all times, not just when a certain age has been reached.
It’s never too late to get started with the process of creating your plan for retirement. If anything, it could save you from experiencing anxiety and worry during what might otherwise have been your golden years. As long as you’re willing to put in some elbow grease and spend the time necessary on these matters, everything will work out according to plan. Just remember; this can’t happen without proper investment strategies being made first so don’t forget those investments or risk facing tough decisions later on down the line!
Start planning for retirement early
It’s never too late to start preparing for retirement but it does take some careful forward thinking about what options work best for your current lifestyle so you can plan ahead as much as possible. The goal should always be long term security not short term fixes.
I hope that this retirement planning checklist has been helpful to you and that it will serve as a good starting point for all of your retirement planning needs.