Imagine your ideal leisure: Are you resting on the beach? Starting a new hobby? Or are you finally taking that trip to Paris?
A comfortable leisure looks different for everyone, but most investors share some common goals. We’ve divided them into 4 main sections to help you get started. Determining how you prioritize these goals is the first step in creating a road map to financial security in retirement.
Pay for food, clothing and shelter Always Come first. Healthcare costs also fall into this category. Requirements are considered a “cash flow” goal, meaning they often require income from a variety of sources, such as government benefits (e.g., social security) or IRA. These routine expenses are usually less expensive than your other expenses but occur more frequently. Since this section allows for minimal investment risk, it may be helpful to make an additional assessment of your future expenses in this area.
“Just in case” savings
At some point in leisure, you will probably have a wonderful expense, such as car repairs or a new roof. Rainy days can be reassuring to have funds when unexpected pop-ups. Contrary to requirements, such spending is an “asset reserve” goal, so you’ll want enough savings to cover these potential costs. Helpful Tip: Maintain a liquid investment that allows you to make quick cash (or save cash yourself) for these expenses.
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Consider hobbies and activities that you want to enjoy in your spare time. Even if it’s just an occasional meal at your favorite dinner or a quick vacation, you should factor this type of cost into your plan. As a requirement, this is considered a cash flow goal, so be prepared to separate a few dollars from different sources of income. Expensive vacations may be out of reach for now, but you can probably enjoy small luxuries while saving.
One day you may want to transfer your assets to an heir or charity. For many investors, this goal is the lowest priority. If you decide to share your money, those savings (like other asset reserve targets) are put into liquid investments for easy transfer of assets. Remember: You can always contribute to your inheritance in your financial way – as with your time.
Retirement may not be far off, but there is still time to make a solid plan. Saving and prioritizing – These goals can help you get on the path to financial security. After all, isn’t the ultimate goal of retirement to enjoy it?
“4 General Retirement Goals”,