How To Know If Your Retirement Goals Are Realistic

Retirement is always an opportunity to relax and focus on the most important goals in life. Retirement should thus be accompanied by goal setting. This is the time to be realistic with yourself in terms of what you wish to achieve. It is also a time to concentrate on building your wealth and achieving your life desires. Many retirees may find themselves stuck, especially since they are presented with multiple variables and are spoilt for choice when it comes to goal setting. The multiple variables involved and the many aspects of balancing in retirement may cause you to set unrealistic retirement goals.

Goal setting during retirement should be focused on financial reality rather than myths. When planning for retirement, you should consider the relatively high medical needs and the lost benefits that you previously enjoyed while you are employed. This means that upon retirement, you may find yourself spending more on areas such as housing, food, and medical needs. Understanding this reality helps you set your goals accordingly by not expecting much during your retirement compared to when you were working.

To ensure that your retirement goals are realistic, it helps to conduct a thorough assessment of your expenditure and financial profile just after retiring. Good expense analysis should comprise both fixed costs as well as variable costs. Fixed costs are those elements of expenditure that comprise basic needs, such as housing, medical insurance, and maintenance. On the other hand, variable costs are elements of expense that may change depending on your personal needs, such as food, entertainment, travel, and transport-related costs, among others. Realistic retirement goals should be made after factoring in these two areas of expenditure.

A realistic post-retirement lifestyle generally comprises various variables that may change from person to person. There are three main categories that you can use to position yourself categorically. In the first 5–10 years after retirement, you should expect an increase in expenditure, especially due to the lifestyle readjustments that are associated with retirement. The second category ranges between 10 and 15 years after retirement when your health needs gradually replace your lifestyle needs. Traveling becomes less of a necessity, and staying healthy becomes a priority. The last category comprises 15 years and above after retirement, during when health and personal life maintenance costs tend to go up.

Originally posted on andrewcosta.co.