Planning ahead for retirement is a question most don’t take serious until its too late. There are many things you have to decide when planning your retirement. Most people have a tendency to focus on a dollar amount without factoring little nuisances. There are many scenarios for retirement you have to decide which one works for you. Scenarios such as are going to rent vs. own, lifestyle, debt payoff, location and etc.
Rent vs. own
If you decide you want to own a house when you retire it is better to buy a town house or condo. In today’s world passing down a house to family members is still common, but most kids want to branch out and buy their own property. When buying your property make it count. When doing research make sure to factor in income taxes, sales tax, type of people and weather. It also helps if you take plenty of vacations prior to retiring so when you retire you know exactly what you want.
When planning ahead for retirement you have to decide what type of lifestyle you want to live. Most people are comfortable spending close to six figures in retirement. If you live out most of things you would normally live out in retirement you will more than likely make better decisions and get a different fulfillment when retired. When saving for retirement trying to live like a rock star in retirement can be difficult if you don’t get ahead start. Never worry about what your peers are doing if they are holding you up you will not feel fulfilled in retirement.
Some may argue about paying off debt while saving for retirement. When paying off debt you must make sure the debt is worth paying off. There are some debts which appear on your credit report which will eventually fall off. If you are not concerned about your credit score prior to retiring then this isn’t a bad option. Paying off debt on your property should be easy. Most people have a tendency to max out their budget when buying a property. If your financial/Realtor says you can spend 33% of your income doesn’t mean that you do. You should buy property in your retirement location and rent up until then.
Most people have a tendency to go with the fan favorites for location. I stress the importance of traveling to cities you would not normally travel to just get a good feel of what you want. There is nothing worse than planning and when you arrive to your destination you are unhappy. Picking a location is as important as the saving aspect do not get lazy.
There are many reasons planning ahead for retirement should not be taken lightly. Please note I am not a qualified financial expert, but the advice can be brought to a professional. Good luck!