There are many questions to ask yourself when thinking about retirement. When will I retire, how much money do I need to feel safe, where will I live, what will my standard of living be?
Another big thing to keep in mind when thinking about retirement is that the average life expectancy keeps increasing. Instead of retiring at 65 and having enough to last you 20 years, a good idea is to have enough for 30 plus years. What if you live until you're 105 years old, but only saved enough to last you until you're 70 years old? That obviously will not work out!
It's hard for me to think about retirement. I'm 23, so I still have a long time to go. But I do need to be constantly thinking about it, since of course retiring is a goal of mine.
|This is my idea of a good retirement.|
How much money will you need?
This is of course one of the biggest questions. I hope you all have somewhat of an idea of how much you need. I think last time I checked, I would need around $4.5 million in order to fully retire.
This all varies when you factor in a lot of different areas. Will your house be paid off? Do you plan on traveling extensively while in retirement? Do you have to pay for your health benefits?
Many think that they will need much less because most things will be paid off, but that's not always the case. I've heard of people just planning on using 50% of their current income as what they'll use when they retire! Usually 50% will not be enough, unless you are already only living on one salary (and it's working for you).
When do you want to retire?
I would like to retire young. In order to do this, I need to start thinking of some ways for passive income in order to sustain me until I'm older (well until I die, to put it bluntly). I want to retire young so that I can experience and do everything while I'm still able to do everything.
How do you want to live?
Most people keep their same standard of living. It would be hard to live on less than what you're used to, in order to make your money last. Will you travel to a bunch of places? Move closer to your family so that you can spend more time with them? Will you be a recluse or will you be trying a ton of new things?
Where do you want to live?
There are so many options out there. I would like to travel and live in other countries. Cost of living can be much lower in other countries, which could help you stretch your dollar much further. I know Puerto Rico isn't super far away, but when we went there on vacation last year, we met a lot of people who moved there and said that the cost of living is much cheaper, and that living on the beach there is very nice. This is something that we have definitely considered.
Do you want to travel, work part-time or relax?
I would like to say that I would retire and just stop working altogether, but I doubt that will happen. I'm sure I'll travel in the beginning, but after that I would of course want something to fill my day. If not working at least a little bit (or having some passive income) then I would want to do something.
This could be volunteering also. I would love to dedicate my time to volunteering at many places such as shelters, food pantries, animal causes, and so on.