Sense & Centsibility Blog
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Retirement: live for today and plan for tomorrow

We're flashing back to Mary's post about planning for retirement. Because it's never too early to plan...and there's no time like the present!

So, you are FINALLY nearing retirement age, but you and your spouse never actually discussed what this would look like. Perhaps you put it off for lack of time and energy. It sneaked up on you while you were busy driving kids to soccer practice, dance classes, and planning weekend basketball tournaments out of town; not to mention all of the cooking, cleaning, and laundry, you’ve had to keep up with for the past 20 years.

Wow! Has it really been 20 years?! It feels more like five or six years at the most, but now your kids are all grown up. They’ve moved into adulthood and out of your house (for now at least). Sure, you might catch them grocery shopping in your cupboards on those occasional home visits, but for the most part, they are self- supporting. Now that you are an empty-nester, you can’t help but be reminded that retirement is just around the corner.

Maybe you’ve avoided discussing retirement because it would require you to face the fact that Social Security income won’t be enough to cover the monthly bills. You figure you might have enough invested in retirement accounts to get by for a few years, but then what? People are living much longer these days. One in four 65-year-olds will live to the age of 90. What will you do if you happen to be that lucky one in four who lives 15 years longer than anticipated?

Master your fears and create a plan

In order to master your fears, you need a plan. You cannot create a plan unless you think about what you want. If you haven’t done so already, take some time to think about what you want your retirement years to look like. Where would you like to live? What would you like to do? At what age do you plan to retire? Don’t let fear stop you from creating a financial plan for your future. Although planning for retirement might seem like an overwhelming task, choosing to take control is much easier and a lot less work than spending most of your time worrying and avoiding the issue.

Set goals with your partner

Retirement means something different for everyone. When the noise of raising a family is no longer there to distract you, and all you have is time, each other, and a fixed income, you will wish you had talked about your financial goals, hopes, and dreams together.

Even if you already have a nice nest egg saved for retirement and your house is paid off, have you talked about what kind of lifestyle you would like to have when you retire? If your idea of retirement is to continue living in your current home and plan extravagant vacations around the world, and your other half has dreams of owning a goat farm in South Dakota someday, then you are both in for a rude awakening!

Don't just assume that your picture of the future looks the same as your partner's. Designate regular time to actually talk about your individual dreams and goals so you can create a plan and future that will suit both of you. Keep in mind that people change and so do dreams, so make sure to check in with your partner on a regular basis.

Put your money where your goal is!

Most of us grasp the importance of saving for retirement, but too many people passively save for retirement without really knowing exactly what type of lifestyle they are saving for or how much savings they really need. The amount of retirement savings you will need really depends on how you plan to live out your retirement years and at what age you plan to retire. Will you continue to work when you start receiving social security or do you plan to retire early and stop working? There are many options to consider. Social Security has an online retirement estimator that shows you your future Social Security income based on your actual earnings. This online tool will also allow you to explore “what if” scenarios so you can see how income will change based on the age you choose to start receiving benefits.

Keep in mind that Social Security's benefits are not guaranteed. Some elected officials consistently propose cuts to Social Security benefits. And policymakers need to make changes in the program to make its financial future more stable. (While the program has enough reserves to pay current recipients, it will not be able to pay full benefits at some point within the next 20 years if elected officials don't make changes.) The lesson is, don't rely on Social Security alone to meet your retirement goals. There are plenty of online calculators to help you plan for your retirement. Check out the AARP Retirement Calculator.

Live for today and plan for tomorrow

Some people are so busy living for today, they don't ever take the time to think about what they want their futures to look like. Maybe you don't even know what you really want for the future and you figure things will just turn out how they are supposed to. If you are this type of person, I want to challenge you to start dreaming's never to early to plan for the future. Figure out what you want so you are able to set goals that will lead you to your dreams!

Need help getting started? LSS offers free debt and budget counseling. We are here to help you get your financial life back on track today and pay off debt so you are in a better position to plan for tomorrow. Call to schedule an appointment at 1-888-577-2227 or GET STARTED ONLINE now.

By Mary McKeague