The Ultimate Retirement Planning Checklist: Steps to Securing Your Golden Nest Egg

What does your golden nest egg need to be?

Planning for your Golden Years, at any age, should be just as exciting as planning a relaxing vacation to the Beach in Hawaii or a breathtaking hike to the Rocky Mountains. However, for many, it’s a financial planning event placed on the back burner until an unforeseen circumstance creates a sudden urgency. Then one faces the sudden reality that things are not where they need to be to achieve a financially secure retirement.

Many people have never truly examined their financial picture to determine what lifestyle they can afford. (Big Gasp and a large Gulp!) Here it comes; If only I could’ve, would’ve, then comes the should’ve. We don’t want you to think in hindsight. Nope! First United wants to inspire and empower you to make retirement planning easier and more enjoyable, almost like having a travel agent do the work for you. So, let’s put on our travel agent hats and plan your dreamy golden years. Your future self will thank you for it.

“Planning is bringing the future into the present so you can do something about it now.”

– Alan Lakein

Why plan for retirement?

Planning and taking steps now to achieve your goals, will help you increase your chances of success in attaining the life you desire. Furthermore, retirement planning is essential because:

• It will help you achieve financial security in retirement,
• Ensure you have enough money to last throughout your golden years,
• And help you plan for inflation (speaking of inflation, have you seen the cost of eggs at the supermarket lately? They are 70% more expensive than a year ago!) Hence, another reason you must plan for unforeseen expenses in your later years is to have peace of mind knowing that your money will last, even when staples like eggs increase by 70%.

Remember that people live longer than ever, meaning that retirement could last several decades. By planning now, you can ensure your money will last you for the long haul. All Abroad! Let’s travel to your first destination on our checklist to determine your retirement goals.

What do you want retirement to look like?

Envisioning this helps you create your retirement goals. Take two minutes to visualize your retirement. Dream in high definition and play a movie reel in your mind by being as specific and detailed as possible. Give yourself permission to see yourself living your best life.

• “How old are you? What color is your hair? Do you have any wrinkles? What are you wearing? Do you walk with an extra pep in your step?
• Are you kind? Are you joyful? Are you passionately pursuing your life’s purpose? Are you spending more time with family and friends? How do you love your significant other, family, friends, and neighbors?
• Where do you live? Are you strong, healthy, and full of energy? Do you exercise regularly?
• What are your greatest blessings? What bigger purpose does God want to accomplish with you? Will you volunteer? Do you want to travel, play golf, fish, or hunt? Will you spend time at National Parks, or be a boating enthusiast at the lake?
• What are you doing in your retirement? How are you spending your 24-hour day?

These things are essential because they help determine how much money you will need each month when you retire. That was easy and fun. To help you put numbers to your envisioned retirement, click here, and use our nifty retirement calculator. Now, let’s travel to the second destination on our checklist, which is to create a retirement budget.

Create a Retirement Spending Plan!

Start by determining how much money you’ll need in retirement by creating a detailed spending plan that considers all your expenses. A retirement spending plan outlines two things:

• The funds you will have coming in each month.
• And how much money you will need to spend each month to cover your necessities and wants.

Knowing your expenses today will help you assess how much you will need in the future. To create a retirement budget, follow these steps:

1. How much income do you think you will need to have each month? A general rule of thumb is to aim to replace 70-80% of your pre-retirement income. A general rule of thumb is to aim to replace 70-80% of your pre-retirement income. Let’s assume that you and your spouse make $200,000 annually. Here’s an estimate of how much you might need to save for retirement:

   1. If you aim to replace 70% of your pre-retirement income, you will need to save around $2.1 to $2.4 million for retirement to withdraw $140,000 per year to live on.
   2. If you aim to replace 80% of your pre-retirement income, you will need to save around $2.4 to $2.8 million for retirement to withdraw $160,000 per year to live on.

   The amount of money you can safely withdraw from your retirement savings each year to ensure that your income lasts throughout retirement depends on several factors, including age, life expectancy, retirement savings balance, investment returns, and spending needs. One widely used guideline for determining a safe withdrawal rate for your retirement funds is the 4% rule. The 4% rule suggests that you can withdraw 4% of your retirement savings in the first year of retirement and then adjust that amount for inflation in subsequent years without running out of money for at least 30 years.

   It’s important to note that these above examples are just estimates, and the actual amount you need may be higher or lower depending on your circumstances. Other factors to consider are:

   • Your anticipated retirement lifestyle,
   • Potential healthcare expenses,
   • And any other sources of retirement income such as Social Security or pensions.

   It’s always a good idea to work with a financial advisor to develop a personalized retirement plan that considers your individual goals, needs, and circumstances.

2. List out your expected spending each month. Start by looking at your current household expenses like tithing, charities, housing, food (groceries and restaurants), transportation (fuel), insurance (auto, home, life, and health), debt, utilities (electric, phone, gas or propane, cable, internet, trash, water, clothing, medical expenses, and discretionary spending (like entertainment and leisure). Be sure to account for any changes in your spending, such as lower fuel costs and less eating out, if you will no longer need to travel for work. However, if you plan to travel more, increase those costs in your spending plan.

3. The next step is just simple math. Subtract your expenses from your income. Do you have enough income to cover your monthly expenses? If so, great. Your plan is done.

   However, suppose you don’t have enough income. In that case, you can try to decrease your discretionary spending and lower any costs you can. Or, you may need to delay retirement or consider working a part-time job for as long as possible to supplement your income. One of the best things you can do to prepare for retirement is to pay off all your debt. By not having a vehicle payment, mortgage payment, personal loans, or credit card balances, you are setting yourself up for financial freedom and true peace of mind. Click here to learn about proven methods to help you escape debt, which means you won’t need as much income each month during retirement.

4. Regularly review and adjust your retirement budget to ensure you’re on track to meet your retirement goals. Make changes to your budget as your circumstances change.

Following these four steps, you can create a retirement budget tailored to meet your goals. Let’s travel to the third destination on our checklist, evaluating your social security benefits.

Evaluate Social Security Benefits.

According to the DOL, “Social Security retirement benefits replace 40% of pre-retirement income, on average, for retirement beneficiaries.”

Deciding when to take Social Security benefits is integral to retirement planning. You will receive the full advantage if you choose to receive benefits when you reach full retirement age. Suppose you delay claiming benefits beyond full retirement age. In that case, you can earn credits that increase your monthly benefit by about 8% for each year you wait to claim up to age 70.

Social Security’s full retirement age depends on the year you were born. You can apply for your monthly social security benefits any time between ages 62 and 70. The timing is up to you and should be based on your unique circumstance.

Click here to learn more about how your payment will vary based on timing and how much you’ve earned throughout your life. Now, let’s travel to the final destination on our checklist, which is to plan for healthcare costs.

Planning For Healthcare Costs.

This estimator uses your health status and available savings to forecast future healthcare costs. It considers your age, gender, height, weight, marital status, location, Medicare eligibility, whether you smoke, have a chronic disease, and the number of ongoing prescriptions you receive. Uniquely, it also considers whether you currently have health care savings and, if so, how much.

This calculator does not include long-term care. ICMA-RC’s tool paints a holistic picture since it has your projected costs and resources. Playing with this calculator makes it easy to see the positive impact of health savings.

Retirement planning can seem daunting, but with careful consideration and planning, you can achieve financial security and peace of mind in your golden years. Whether you’re just starting out or approaching retirement age, take the time to create a personalized retirement plan that works for you and your unique circumstances.

Thanks for traveling with us today. Enjoy your one precious life!

“Tell me, what is it you plan to do with your one wild and precious life?”

– Mary Oliver