It’s not as if I want to keep working until my arthritic fingers break off on the keyboard, it’s just that planning for my retirement has turned out to be an incredibly dry undertaking. Thinking of how much money I’ll have left in my twilight years isn’t a project that generates its own excitement or momentum, but for the sake of retaining any dignity I have left when I reach my seventies, I think I’ll give these ideas a go:

Consult a Professional

Yes, establishing a budget for your expenses on your own is empowering, but is it accurate? I fully intend hire a financial planner when I remember where I left my day planner. At the very least, I’d find out if I’ll have enough money for the future. A financial planner would definitely know his or her way around statistical probabilities better than I do. One thing to keep in mind though: financial planning should revolve around planning and with less emphasis on products.

Prepare Pre- and Post- Retirement Budgets

My current budgeting technique involves apportioning my wage for movies, gadgets, data plans and the odd trip to the grocery store. While I doubt they’ll be making movies for my age set in 50 years, a financial planner I cornered in the fruit section last night helpfully suggested that I knuckle down and formulate an actual budget for my current expenses.

From this, and assuming no major financial upheavals occur in that time that will affect the value of savings or investments, most people would need 70-80% of their current income to maintain the same living standards during their retirement. On one hand, you could reduce the frivolous expenses, make smart investments and stand yourself in good stead for the coming years, or, you could prepare to work far beyond retirement age.

Using budgeting software or engaging an actual financial planner would provide me with a more accurate estimate, of course, but my spreadsheets will have to do for now.

Eliminate All Debt

If I’ve done one thing right when it comes to managing my finances, it’s keeping the amount of credit cards I have to a minimum. Paying off my student loans in as quickly as possible will definitely free up the funds I’ll need when I retire, even though that day is still a long way off.

One thing I certainly won’t be doing in the short years before I retire is buy a car. A purchase such as a new car or house means that I’d be taking on debt for the coming years. With limited employment options at that age, I’m not sure that is something I want to be saddled with.

Take a Look at My 401(k) From Time to Time

I’m fortunate that my employer matches my 401(k) contributions dollar for dollar. Maybe that’s why I’m so complacent about my financial future. Or maybe I’m just complacent like that. Either way, it might be in my best interest to increase my contribution and pay it forward to myself.

My neighbor, on the other hand, is looking forward to her pension, although she’s also salting away earnings to make her own investments. For her, there’s no telling what might happen in time; pensions aren’t generally indexed against inflation, nor are they transferable from one job to another.

Since we still have a number of years left for gainful employment, we can afford to absorb the loss from investing in mutual stocks and funds (which are riskier but also offer better returns). Going by this, I should be more cautious as the years go by, and bonds would offer a more secure investment option when I’m in my fifties.

Retire in Asia

Sure, it’s a developing continent, but the cost of living there is substantially lower than what it is here. I think this will probably be true even after juxtaposing the ever-spiraling cost of living against the dwindling value of my diminishing savings.

Many people will find it difficult to keep living in their present home upon retirement; this could be due to mortgage payments or maintenance fees. Either way, a smaller/cheaper home or neighborhood or a retirement community are good options for retirees. I could always head to Florida if the plan for Asia falls through too.

I know, if you’re like me, then you would feel that you fully deserve to spend the money you earn each month. Is that enjoyable? Yes. Of course, any sensible wage-earner would tell you that burning through your paycheck in a week (I could stretch it to two) is financial insanity. I do realize that putting off retirement planning won’t make the problem go away, and I don’t want to live on canned food for the rest of my life either. What are your plans for retirement?

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