Does Planning For Retirement Still Mean Having It All?
Planning for retirement was not supposed to be so financially challenging. Financial logic says that if you observed conservative spending habits during your working years and started investing when you got your first job, you could save enough money to live on during your retirement years and have it all. Is that still possible? It can be.
Focus On What You Control
The entire exercise of planning for retirement has recently changed a bit thanks to the government’s idea of extending a helping hand. The cost of health insurance under the Affordable Care Act (Obamacare) has altered how much money we will have leftover to invest into our retirement plans. You cannot personally control the dramatic affect the Affordable Care Act (Obamacare) will have on health insurance costs in the future. Nor will you be able to escape the hard reality that under Obamacare health insurance will be very expensive, period!
This is not the time to despair though; it is the time to focus. Since the way we plan for retirement has changed if you want to have it all when you retire you will need to change your focus. You need to focus on what you control. You need to focus on finding financial ways to offset future health insurance increases.
What Do You Control?
Who is in charge of where you spend your money? You are. You determine how much to save and how much to spend. If you are like most households you spend money on 5 major categories; housing, food, transportation, healthcare and retirement. By changing your spending habits you can shift how much money you spend in each category.
Changed Spending Habits Can Be Miraculous
You would be surprised on how much money you can save by switching from a “wants” buying approach to a “needs” approach. Your emotions drive your wants; turn them off when shopping, become a more practical shopper.
Invest the money you spend on entertainment. Rent movies from your library for free instead of spending all that money at the movie theater. Does the outcome of a movie change if you see it in your family room or at the theater?
Get in the habit of only buying sales items. Who pays full price anymore…for anything? Grocery stores have sales “cycles”, which means that the items on sale this week will be on sale again in about 5 to 6 weeks.
Skip the credit card interest charges. Force yourself to pay up front or pay off your credit card balances every month so interest never accrues; if you can’t, you don’t need it.
Your dream retirement has to be more than just having a roof over your head, food on the table and overpriced health insurance. Planning for retirement your way is possible. Understanding that by making the extra efforts to trim expenses where possible and save money for future unknown offsets is a start in the right direction.