Whether you’re age 25 or 60, we hope that you’re planning for your retirement years. Imagine having a 40-year career, retiring at age 65, and living another 20 years or more after that! The key is early planning so that you’re as set as possible when you’re ready to make that change.
As you think about what you’d like to do after your current career, you’ll need to consider the cost of the post-career lifestyle that you’d like to have. Perhaps you’ll just want to maintain your current lifestyle, or you might want to travel to the places that you’ve always dreamed of visiting. Maybe you’ll consider downsizing or living somewhere with a lower cost of living. Or you may decide to start the business that you always wanted. The thing is, with the demise of pension plans, it’s up to you to prepare to have enough money to take care of your needs, and live the way that you’d like when you’re ready to move into the next phase of life.
The current guideline is that you should have about 80% of your annual income to retire comfortably. After years of paying for housing, cars, living expenses, children, braces, college tuition, and weddings, you’ll need to have savings and investments that will allow you to live the way you’d like to after you retire from your job. You should also plan for extras like unexpected health care expenses and caring for aging parents, for example.
The coronavirus pandemic has created uncertainties for many of the best-laid plans. If you’re young enough, hopefully you will have time to recover and build your retirement investment. However, if you’re closer to retirement, you may need to adjust your strategy to prepare for your next chapter of life. Either way, you might be surprised to know that there are a few new rules of thumb for retirement planning which might replace your current thinking.
We’re not the experts on how to do all of this, but The Washington Post just published this guide to the “New Rules of Retirement” that we thought everyone should read, no matter where you are on the planning spectrum. So, without hesitation head on over to the WaPo and see whether your ideas for your retirement plan are generally on track or if you need to consider a makeover. Then get expert help from a financial professional who can help you plan best for your personal situation.
Note that Maxwell’s Playbook is not an financial advisor. This information is only for information purposes and should not be taken as investment advice. Readers should do their own research and consult a financial professional for advice related to their personal circumstances.