Have You Written Your Retirement Plan Yet?
Experts tell us that achieving a goal is more likely if we write that goal down. If written down you can monitor it, adjust it and focus on its completion. This approach applies to straightforward goals such as achieving a promotion at work or more complex goals such as losing weight.
For some reason though many people forget to apply the written approach when they working on their retirement plan. A written plan helps you hold you accountable to you.
Step 1 – Stop Saving Blindly
Take the first step to writing your retirement plan, stop saving blindly, know how much you will need in the end. Retirement calculators are very effective in helping you determine how much money you will actually need to retire someday. The figure generated from the retirement calculator is your target, your estimate, your projection.
By writing down this calculated amount of money, you can gauge your progress. A written target amount vs just a vague visualization in your head is easier to refer back to it and make the necessary updates as you go along.
Will that target amount change over the years? Of course. The retirement calculator works with current information to help you crunch your numbers to come up with an estimated future need. To generate a projected amount of money for you it considers your current age, current salary, current savings, annual retirement plan contribution amounts, current debt and the age you want to retire at. It also takes into consideration future costs such as healthcare, your retirement hobbies and entertainment or travel expenses.
Step 2 – Write It All Down
Refine your written retirement plan even more by setting your savings goals. Are you currently saving any money for retirement? If not, write down how much you will start saving. Write down what date you will start by. Write down where you will get the extra money from. What other expenses can you cut in order to find that extra money?
Step 3 – Track The Growth
Keep track of your investment’s growth by keeping a written record. You do not need fancy charts and graphs to effectively monitor the growth of an investment; you just need to keep track of the fees and expenses that you are paying. They have a huge impact on the growth of your retirement plan; they effect how big or small your retirement nest egg will be. Annual statements will break down your fees, expenses and growth so use them as a monitoring tool.