Who better to ask how to plan for retirement than those who are living it now? Nationwide and consumer research company Yankelovich surveyed current retirees to find out their advice on retirement planning.
Monitor your investments in pre-retirement
Money needed 5-10 years into retirement is most vulnerable. It is money you may immediately need, and you don’t have time to recover it if it is lost. Look for types of investments with predictable sources of income.
Plan for inflation
Inflation can eat away at the buying power of retirement funds. Remember to plan for rising costs when estimating how much money you will need to cover your expenses during retirement.
Focus on physical health
In light of increasing health care costs, focusing on physical fitness today is critical to remaining fiscally fit in retirement. The high cost of health care is often overlooked by retirees, despite the fact that this cost is climbing each year. Health care expenses can certainly burden your finances when you consider that the average hospital charge for coronary artery bypass surgery is $63,648.1
Put yourself on a spending budget
The best way to plan a budget is to know how much you can safely spend in retirement. Include each of the monthly expenses you think you will have when you retire. Remember to budget for unexpected expenses like household maintenance or car repairs. It can also be helpful to discuss budgeting with your spouse or significant other to make sure you are on the same page. If you need help getting started, consider meeting with an investment professional.
Get a good investment professional
You go to the doctor as a smart way to stay healthy, so having an investment professional you work with regularly is a smart way to plan for fiscal health in retirement. Check out Nationwide’s Find an Investment Professional tool, or talk to friends for recommendations on who they use.
According to the 2012 National Retirement Risk Index, even if people work to age 65 and annuitize all their financial assets, more than half are at risk of being unable to maintain their standard of living in retirement.
One of the best ways to ensure you have sufficient money well into retirement is to work a few additional years beyond what you originally had planned while saving for retirement. It may not be what you want to do, but it will add more cushion to your nest egg in the long run. Even an additional couple of years can add significantly to your retirement funds.