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Map your clear path to retirement

Do you have a retirement dream once you stop working? How much will your dream cost?

After spending a career thinking about how you want the next step to unfold, it鈥檚 going to take the proper funding to bring your dream to fruition. How will you determine a budget for retirement? 

There鈥檚 not a one-size-fits-all answer, but a common concern among Americans is outliving their money. Mapping out a plan well in advance is a good way to identify potential income gaps and close them while there鈥檚 time to take steps that can help your assets last through retirement.

Obstacles to retirement planning

The economy and global events are contributing factors that can lead to market volatility, and inflation continues to be a concern. No one has control over these external pressures, making them difficult to plan for. However, taking inventory of your savings and the income and expenses you expect to have in retirement can help you achieve the lifestyle you want.

In surveying U.S. adults about their retirement savings strategies and related topics, we found that 55 percent are worried about outliving their money. A separate joint poll from revealed several other important insights that may cause you to think about your finances in retirement from a different perspective. 

• Inflation causes concern. Seventy-one percent of Americans polled said inflation is one of their top financial concerns that could change their retirement savings strategy to account for it.
• Market volatility is top of mind. Respondents also expressed concerns about a potential recession, saying it鈥檚 one of their top two financial concerns.
• The future of Social Security. Many people aged 50 or more cited their uncertainty over the financial strength of Social Security as one of their top two concerns.
• Health care costs are underestimated. With 72 percent of the respondents concerned about the rising cost of health care, it鈥檚 important to think about how you鈥檒l manage these costs if your job doesn鈥檛 provide retiree health coverage and you鈥檙e too young for Medicare.  

• Longer life expectancy needs considered. As lifespans increase, it takes careful planning to make sure your retirement income strategy sets you up for success and your savings doesn鈥檛 run out too soon. 

Closing the gap

Hal Hershfield, Professor of Marketing, Behavioral Decision Making, and Psychology at UCLA鈥檚 Anderson School of Management, found that people have trouble imagining their future selves, and that can keep some people from planning ahead for a major event like retirement. Without that mental picture, the future may seem too abstract. The disconnect between their present and future selves can lead to hesitation and uncertainty around financial decisions.

Creating a retirement budget years before you need it can be reassuring. Not only will you see how much you鈥檝e saved and get an idea of future expenses, you鈥檒l see where your future income is coming from. If there are gaps between expenses and income, looking at the big picture will reveal them. And keep in mind it鈥檚 best to find gaps while there鈥檚 time to course correct.

Maintaining your standard of living

With some retirees spending more money than they expected, it may mean lifestyle changes to help retirement assets last longer. of those surveyed say their standard of living in retirement is lower than it was during their working years.

surveyed try to stick to a monthly spending plan. Before committing to anything specific, you might start by understanding some of the needs you may have in retirement. This  can help identify what types of retirement savings needs you may have. With a better idea in mind and your priorities penciled out, it鈥檚 easier to project how much income you鈥檒l need to live the life you want.

If there are gaps between your income and expenses, consider shifting strategies if you need to. That could mean cutting current expenses by downsizing your home and putting that money toward savings or making extra mortgage payments to make sure your house is paid off before retiring. Maybe the solution is looking into financial products that can guarantee a steady stream of income in retirement, like annuities.

This can help you begin to map your retirement in three easy steps. 

Prioritizing what an ideal retirement looks like for you can help determine the diversified income strategy you鈥檒l need to get there, but the first step is knowing where you are today. Taking time to assess your savings and estimate your retirement spending and income sources now can help you map your path to a remarkable retirement.

Want the most from your retirement? Get smarter with Smart Strategies from 麻豆传媒. Your source for tips, tools and financial solutions that can help you live your best life.