How to plan for retirement beyond your finances
To talk about retirement is to talk about free time, rest and, of course, savings. However, this stage of our life involves much more than money
Financial planning is an important factor that influences other requirements and concerns in your life. It is true that money is essential especially in how it contributes to other areas. Without enough money, you won’t be able to enjoy the retirement you imagined.
Plan your finances at the time of retirement
Money provides peace of mind. In fact, according to a study done Merrill Lynch and gathered by the website preahorro.com, 88% of people are looking for mental clarity in regards to their personal finances, while only 12% wish to amass as much money as possible.
As a result, many people regret decisions they’ve made. Curiously, 36% state they would have changed the way they acted with their money. In comparison to this, only 18% would have done something differently with their professional career, and 15% in regards to their health. Among the decisions they would have made, 90% believe that they would have spent less money, and 79% would have sought out financial advice.
Health upon retirement
“The important thing is to have your health” is something that we’ve all said at some point. Most people firstly prefer to have their health when they retire, followed by money, family, and friends.
However, it is a factor that is usually given less attention. One of the mistakes that most of us make when planning our retirement is to believe we will be the same at 60 years as we are at 80. This is an unforeseen cost.
The best thing is to maintain healthy habits throughout your life and avoid vices that might increase the likelihood of you suffering a serious illness. For example, a full-time caregiver could cost between 800 and 1,200 euros in addition to costs of social security. Not to mention possible private medical treatment.
Work after retirement
It might seem unbelievable, but according to data from Aegon, only 48% of the Spanish population expect to abandon work after retirement, while 39% will continue to work, while in a different capacity.
There are four types of retired workers:
- Those who do so because they enjoy their work.
- Work with NGOs.
- Those who do so for their social connections.
- Those who work out of economic necessity (28%).
Family while retired: happiness and arguments?
Family is one of the main sources of happiness. However, sometimes, that affection also produces emotional and economic tensions.
On one hand there is the feeling of being a burden. No one wants to pose a problem or be a burden to their family, especially older people. While on the other hand, there is tension caused by other dependents. In many cases, parents become a family bank, lending money to their children at the expense of their retirement.
It is important to communicate well within the family regarding economic topics (will, dependency care in old age…) and better financial education to enhance the independence of all members (educating your children to have financial freedom, or teaching them how to save).
Housing can be a source of savings in retirement
If upon buying a house we see it as an investment and not only as a place to live, it is essential to draw up numbers. Above all to be sure about the real cost of housing (taxes, fees…), not only what you’re paying to acquire it.
The house will adapt to different stages of your life. For example, if you are young and live as a couple, you will need a one bedroom apartment. However, when you have children, you may have to move into a house with more rooms. Once you get older, do you want to keep a home (heating, taxes, cleaning…) with several rooms and more space? Although spending increases, most families remain in one place.
The most profitable is to rent the house and move to a smaller one. That way you’ll be putting in more money for your retirement.
Enjoy recreation in retirement
This is another of the most important aspects. After a lifetime of working, retirement has to be when you enjoy your time, travel, and rest. According to the Merrill Lynch study that we’ll reference again, freedom and flexibility are barely related to this. Most pensioners state that experiencing new things is more important to them than buying things.
After all this, you will see that each small step you take in your life will shape your retirement, especially in regards to health. Returning to economics, if you want to relax more about retirement count on financial strategies and retirement plans. For example, you can put aside some of your paycheck while you’re young, just as many parents do with their children to ensure a sound academic future.