Retirement Plans

Retirement is a dream destination for most working people. Visions of vacations abroad and slow-paced days without the pressure of email notifications or meeting for the sake of meeting fill the minds and hearts of many who wish and hope for a happy retirement of ease and leisure. For many people who plan on retiring one day, those hopes and wishes for retirement may dissolve if certain financial habits are not curtailed, controlled or totally eliminated.

The goal of retirement may be admirable, even desirable, but the actual accomplishment of retirement may require years of saving and sacrifice. Few retirements are based on lottery winnings or inheritance windfalls. For the average working person, retirement will depend on two major factors: how much money a person saves towards retirement and the habits formed for how one handles the money saved for retirement and other purposes. These two factors will prove vital to bringing about a successful retirement. The amount saved is important and critical to determining whether a person works during retirement or just lives a life of leisure. However, the habits formed in regards to money, savings and long-range planning will prove either beneficial or devastating for one’s retirement.

The habits formed leading into retirement will either make or break a person’s retirement plans. A person who plans to retire within the next ten years, for instance, needs to evaluate his or her options going into retirement based upon how much has been invested and saved towards retirement. Additionally, the same person must evaluate his or her overall retirement plan such as vacations, housing costs, and expected medical or health-related costs. The same person may need to develop the discipline to save more towards retirement as well as the strict discipline to live on a fixed income for a certain number of years. In fact, retirement might call for one to also consider downsizing to lower housing costs. The fact remains that retirement hinges on the amount saved and the habits formed by the person seeking to retire.

Beyond stock market crashes and real estate busts, the primary threat to one’s retirement is the person’s own spending habits. Saving and investing are good habits to maintain, but spending will certainly cause a person’s retirement savings to dwindle. If retirement is on the horizon, the person who is seeking to retire must develop the discipline of patience and delayed gratification when it comes to spending. The goal of retirement has to become a priority as opposed to weekend shopping sprees and purchasing a new vehicle. Discipline and sacrifice have to fit in there, too. Otherwise, the would-be retiree could find himself or herself in dire straits when it comes to retirement.

Another potential threat to retirement is the lack of balance. College savings, housing costs and care for older parents can all serve as fatal factors to one’s retirement when they compete for funds at the same time one is trying to save for retirement. Competing factors can throw retirement plans out of balance. If a potential retiree lacks the ability to balance multiple savings plans with discipline and patience, the potential retiree will soon discover that his or her retirement plans may end up falling short. The retirement saver needs the ability to balance multiple financial goals that may very well overlap. If not, retirement may remain as a distant dream rather a near future for such a person.

Retirement is about getting there and sustaining a certain lifestyle once there.  No one wants to struggle through retirement. Retirement plans may require adjustment due to economic factors out of one’s control as well as household and family issues such as kids in college or older parents. Let retirement planning include adjustments and options. There is no need to lock into a goal of sailing the high seas throughout retirement if the cost for preserving the family home will cause all of the family’s assets to sink month by month. A person’s retirement plan may call for some adjustments and evaluation of different options.

Get as much information as possible about retirement. Any plan is only as good as the information utilized in developing the plan. One’s retirement plans should include more than lifestyle choices based upon hopes, wishes and dreams.  Such plans need to include the type of lifestyle that will allow one to live comfortably for anywhere from fifteen to twenty years, even more if the person retires at an early age compared to peers. To truly enjoy retirement, retirees have to develop the habits that fit their retirement lifestyle capacity. Otherwise, the plans are futile because the habits do not support the ambitions.