There is an old saying “if you fail to plan, you are planning to fail!" Same could be said regarding planning for retirement. Many people have an idea of what their life style should look like in retirement but few have a detailed plan to get there.
A good way to start planning for your retirement is to write down in detail the things you want to do like travel, hobbies or philanthropy. If you can figure the current cost of the life style you would like in the future you then can have some idea of what it will cost you by factoring in a 3% inflation rate over the years you have until retirement.
Some hobbies can actually earn you extra income in retirement so keep an open mind. If you plan on traveling a lot then make a list of every place you would like to visit and the things you want to do there. Research each destination, currency exchange rates, lodging cost for the duration of each trip.
Another rule of thumb in planning for retirement is to use your age as a percentage. If you’re 50 years old then you want a minimum of 50% of your assets protected in something safe and each year you get older increase that percentage by 1%.
Another factor to consider in retirement is the increase cost of living. Since you’re no longer working and receiving a raise you need a plan where your income can increase over time. Someone retiring in 1988 with a $40,000 annual pension may have thought that was good at the time but not so good in 2018.
The early you start planning and setting goals the better chance you have in achieving the retirement lifestyle of your dreams.