How do you know if you're ready for retirement? Review this pre-retirement checklist to help you determine how prepared you are today and what steps you may need to take to plan for your financial future.
#1: Think about your retirement lifestyleStart by writing down your goals for your retirement years. Do you want to travel the world? Spend time with the grandchildren? Pick up a new hobby? Move into a new home? Continue working part-time? Your desired retirement lifestyle will help you determine how much you need to save and the timeline for your retirement. #2: Calculate your future retirement incomeA pre-retirement calculator can help you estimate your monthly income generated by retirement vehicles like your 401(k). It's important to re-evaluate your expected retirement income on an ongoing basis. Inflation, fluctuations in the economy and changes to your personal situation may all affect your future retirement income. #3: Identify potential gapsAs you get closer to retirement, you might discover that your estimated retirement income won't be quite enough to meet your future needs. The difference between your retirement income and actual expenses is called a Retirement Income Gap. If you find yourself in this situation, don't panic. Knowing that you have a possible gap is an important step to help you get back on track and improve your retirement outlook. #4: Test your retirement budgetOnce you have a clear understanding of your retirement income and expenses, consider taking your retirement for a test drive. Practice following your retirement budget for a month, using a set amount for things like groceries, travel and entertainment. If your planned budget feels too tight, you'll know far enough in advance to make adjustments.
#1: Think about your retirement lifestyle
Start by writing down your goals for your retirement years. Do you want to travel the world? Spend time with the grandchildren? Pick up a new hobby? Move into a new home? Continue working part-time? Your desired retirement lifestyle will help you determine how much you need to save and the timeline for your retirement.
#2: Calculate your future retirement income
A pre-retirement calculator can help you estimate your monthly income generated by retirement vehicles like your 401(k). It's important to re-evaluate your expected retirement income on an ongoing basis. Inflation, fluctuations in the economy and changes to your personal situation may all affect your future retirement income.
#3: Identify potential gaps
As you get closer to retirement, you might discover that your estimated retirement income won't be quite enough to meet your future needs. The difference between your retirement income and actual expenses is called a Retirement Income Gap. If you find yourself in this situation, don't panic. Knowing that you have a possible gap is an important step to help you get back on track and improve your retirement outlook.
#4: Test your retirement budget
Once you have a clear understanding of your retirement income and expenses, consider taking your retirement for a test drive. Practice following your retirement budget for a month, using a set amount for things like groceries, travel and entertainment. If your planned budget feels too tight, you'll know far enough in advance to make adjustments.
Everyone's road to retirement is personal and unique. It takes careful preparation and planning to make your goals a reality. The good news is, you don't have to do it all on your own!
At Wright-Patt Credit Union (WPCU), your retirement goals are our passion. Let the CFS* financial advisors and registered representatives on WPCU's Retirement Solutions Team, available through CFS,* help you develop a personal plan that will help put you on your path to success.
Schedule a complimentary appointment today with one of our CFS Advisors to review your current retirement plan.