When working on retirement planning, it’s important to think about what your retirement will look like. Will you be content to focus on occasionally playing golf and spending quality time with family and friends? Or does your ideal retirement involve lots of foreign travel and dining out at fancy restaurants? When beginning to think about what your financial needs will be in retirement, it can help to write down five goals you would like to accomplish in your golden years. These don’t have to be monumental achievements, just what will make you happy. For example one of your goals may simply be to fully relax after decades of hard work. But by starting to think about these types of things, you can begin to build a plan for your retirement around those goals.
The traditional rule of thumb with retirement was that you will need 70-80% of your income in retirement to be able to live a comfortable life. However, everyone’s situation is different: some people find that they actually spend more money in retirement than they did the last few previous years and others find they are perfectly content to live their mature years modestly with simple pleasures. Completing a retirement budget is a far more comprehensive way to examine your money needs than simply relying on a percentage of your current expenses. While it can be difficult to project your lifestyle into the future especially if you are currently many years away from leaving the workforce begin by using your current budget as a jumping off point. Think about expenses that may be less in retirement like clothing or gas and expenses that could be more like airline tickets or healthcare expenses. Of course, remember to calculate inflation, especially if you are more than a year or two from retirement.
EcoCapital seeks to provide its clients with retirement planning advice as well as manage investments towards retirement. This service is tailor made as it is designed to take into consideration the individual’s current situation and future expectation. EcoCapital does not charge management fees for this service but performance fees if performance targets are met.