How to Have Realistic Retirement Expectations
What do you think will happen when you retire? What kinds of things do you want to do? Will you enjoy not working, or will you miss the sense of purpose each and every day? Having realistic retirement expectations is vital for your happiness, financial status, and wellbeing, but it’s difficult for many people to learn how to set expectations. Here are some tips for doing just that.
Know What You Want from Retirement
First things first, it’s important to spend some time thinking about what you want your daily life after retirement to be like. Do you want to spend time relaxing at home, or would you rather buy an RV and travel the country for months out of the year? Understanding how you plan to spend your time is a great first step for everything else, including your financial planning. Being realistic about things will help you decide how much you really need to save and whether your dreams of leaving your home behind for the open road can come true. What’s more, it’s perfectly natural for your retirement goals to change with time. Just make sure you’re adjusting your savings and investments along the way to compensate.
Don’t Assume You’ll Be Happy to Leave Your Job Behind
Everyone looks forward to retirement to a degree, but not everyone is truly prepared for waking up each morning without the need to go to work and fulfill a certain role. After all, people work hard all of their lives to enjoy fulfilling careers, and suddenly giving up that career can leave them feeling empty. If you don’t take the time to think about how you might handle those feelings, you might find that your retirement isn’t as fun or relaxing as you’d like. To combat this, anticipate a few negative feelings now and then – especially at first. Then, find a way to combat them. For example, if you worked as a journalist, offer to write an editorial piece once a month. This can help both you and your employer in the long run.
Don’t Procrastinate with Your Savings
When people are young, they rarely take the time to think about how much money it’s going to take to retire. If they do, they think about things in terms of today’s cost of living without accounting for things like inflation. Just look at how much things have changed in the last 30 years; it’s a good indicator that the trend will continue for the next 30. When saving money for retirement, keep in mind that even a half million dollars won’t be worth what it is today. Make sure you account for inflation so you don’t find yourself struggling when it’s time to actually hang up your hat and retire.
Setting realistic expectations for retirement is about much more than simply saving enough money. You’ll need to understand what you want from your retired life and how you’d like to live. However, you’ll also need to account for inflation, which is one of the most common mistakes young people make when it comes to saving. Setting the right expectations from the start makes retirement easier – and far more enjoyable.