According to research, having a higher socioeconomic status is linked with a decrease in morbidity and mortality rates in many populations. The causal mechanism of this linkage has not been recognized clearly enough. However, many believe that having financial freedom, access to better healthcare and a sound educational background are contributing factors. Thus, the notion of healthy, wealthy and wise is evident, and is never more applicable as it is among those in their retirement age. Therefore, the goal of this article will be to suggest some of the important financial goals for you to have in order to become healthy, wealthy and wise during your retirement period.
Determining retirement goals
First of all, it is necessary to determine your retirement goals before deciding on the financial means that will help achieve those objectives. These goals may include, buying a house and property in a place where you always liked to live, buying a car that you always wanted to drive, traveling to places that you never had the chance to visit, engaging in recreational activities that you never found time to engage, learning something new that you seems to have missed during your early days, helping people who are less fortunate or fulfilling the dreams of your spouse and the family as much as possible. When looking at these goals, it is obvious that you never can plan or predict the expenses that you may have to incur when realizing your retirement dreams or perhaps the life’s dreams. However, once the retirement goals are set, it is easy to think clearly about the realistic nature of achieving the same, and if possible, where the funds will come from.
Following the determination of retirement goals, it is necessary to think about the retirement period and the potential expenses associated with the same. As pointed out by analysts, the retirement can be divided into three phases. The earliest phase would be the most expensive as it is the time when you will try to realize most of your dreams. During the middle phase, you will be more settled and will look at ways of keeping costs down. In later retirement years, the costs pertaining to health could be more and in certain instances, the expenses during this phase could be hefty. Thus, the financial goals that you intend to set should take the different phases of retirement as well as the way you should finance each of the phases without having to empty the savings in to consideration.
Sources of funding
During retirement, you may be expecting funds from various sources. These may include social security benefits, pension, other welfare benefit plans, savings in the banks or other securities as well as inheritance. While social security benefits and pensions are relatively immune to inflation, other income is not necessarily protected from rising inflation. In addition, some of the expected income may be taxed and would not yield as much as you have expected by the time you plan to retire. Thus, these factors should also be considered when setting the financial goals or you may fall short unexpectedly.
Setting financial goals
Now it is time to look at financial goals. As mentioned earlier, you have to take all of the above factors in to consideration before deciding how much is enough. Moreover, the financial goals that you have to undertake are directly linked to the retirement goals that you hope to fulfill in the future.
Each of the activities you propose to undertake during retirement should be included as financial goals with their estimated value forecasted alongside provisions that accommodate potential deviations. These goals should be placed against the funding sources that are used for achieving the same, and you will end up with a chart that will show you what you need to do and whether you will be able to achieve the same. However, you should leave room for the unexpected occurrences (e.g. deterioration in health), which can eat up substantial amounts of savings within a short period of time.
Thus, setting financial goals to become healthy, wealthy and wise cannot be done by just considering what you need to achieve after you retire. As described in this article, it should be an informed decision after considering the potential of your earnings and the forces that affect earnings at the time of retirement.