When planning for retirement, there are several factors to consider when creating a realistic retirement plan. While it used to be easy to predict how your retirement would work, these days, it’s not so simple. Many of us have been used to thinking that we should graduate college in our twenties, begin working, start our families in our thirties with an established career, and retire in our sixties. For some, this may be exactly how retirement happens. For others, retirement, and in fact their entire lives, will be much different than this image of ideal retirement and life planning. Don’t worry, though; no matter how unpredictable your career or personal life may be, by planning for your retirement now, you can be sure that you make the right financial decisions today that will ensure a successful retirement down the road. At DunnCreek Advisors, our St. Paul, MN retirement advisors want to help you create a realistic retirement plan for your future. To begin planning your retirement, ask yourself the following four questions:
1. How Long Should Retirement Last?
The length of retirement will depend on the age at which you retire and how long you and your spouse will live after retirement. There is a 72 percent chance that at least one spouse will live to age 85, a 45 percent chance that one will live to at 90, and an 18 percent chance of you or your spouse living to see 95. Given these odds, and your own family and medical histories, you can determine how long your retirement may last based on your life expectancy.
2. How Much Will Retirement Cost?
When determining how much retirement will cost, you need to look at your current expenses and determine what expenses you will have after retirement. You should also consider the lifestyle you want to have after your retirement and whether you want to be able to financially support anyone besides yourself and your spouse. Making a realistic estimation of retirement costs is crucial in planning for retirement, so make sure you consider the possibilities of your retirement.
3. What Sources of Income Will I Have After Retirement?
Will you have social security income? Will you have income from one or more IRA? Estimating your retirement income requires you to know how much income you will receive from each of your sources of income, so make sure you account for only those income sources that will be in effect for your retirement. These sources of income typically include individual retirement accounts, social security, and individual savings accounts. You should also consider economic factors that could limit retirement income sources in the future to determine whether your combined expected income will support you through your retirement when you get there.
4. What Investment Strategies Could Help With My Retirement?
Consider whether you’d like to focus on protecting principal, pursuing growth, or generating income when you’re looking into viable retirement investment strategies. Each of these three investment goals can be accomplished with different forms of investments, and your retirement investment goals will determine the best investment strategies for you. Let our St. Paul, Minnesota financial advisors for retirement at DunnCreek Advisors help you prepare for retirement. Contact us at 612-436-3770 or rdunn@dunncreekadvisors.com today.