How To Plan For Retirement

The decision to retire is a stressful one. It marks the end of a long chapter in your life and the beginning of a new one. It can be a scary decision to make and most people begin the planning process with trepidation. The big question you have to ask yourself is, “How much money do I need to put away for retirement?”

The answer is, “It depends.” Ask yourself what you want retirement to look like. Here’s what you need to take into consideration when planning for your retirement.

Living Arrangements

The first thing you need to decide is your living arrangements: do you want to continue living in your current home or will you move? If you’re moving, will you downsize to a smaller home or apartment, or do you want to keep the same amount of space to encourage frequent visits from family members? Are you staying in the same geographic area or heading for a warmer climate or a place with a lower cost of living?

If you’re planning on moving, do some research into the cost of living in your desired retirement venue, including the cost of housing. Will you need the same amount of money to live there as what you need in your current situation? If you’re staying in your current home, will it be paid off by the time you retire? How much will that save you? Remember, you’ll still need to pay real estate taxes, homeowners insurance and maintenance costs. The absence of a mortgage doesn’t equal a free place to live.