The following is a guest post…
Retirement is the end goal for anyone that has ever started working for a living. Although we may all have different retirement goals and plans, the overall goal is to eventually retire and live comfortably. Many different factors play a role in achieving this end goal and being aware of what they are will give you a better chance to protect your retirement nest egg and be adequately prepared for retirement.
While there are lesser known, “hidden” factors that can influence your retirement, we will start by listing the basic factors that affect retirement and retirement age.
The aspect that most strongly affects retirement is when you start saving. Obviously, the earlier the better but if you get a late start it is possible to catch up by making larger deposits into your retirement savings. This is the second basic factor that will impact when you retire, the amount of money you are able to invest in retirement each year. These are the two most basic factors that will play a role in determining when you retire. By taking the information from these two aspects and using that information in conjunction with a retirement calculator you will be able to get a rough estimate of when you can retire.
With the more basic factors in mind, we can take a look at some of the lesser known factors that can impact your retirement that most people often don’t think about.
Health plays a large role in retirement and it affects retirement in many ways. First off, your own health concerns can play a major role in determining the amount of money you will need to retire comfortably. People often overlook the fact that as you get older more and more health issues arise and these issues can be very costly. Based on your current personal health situation, you should be able to gather some idea of what your health costs will roughly be when you retire and these costs need to be accounted for in your retirement plan.
Another aspect of healthcare that affects retirement, which most people don’t even consider, is caring for others. Many people find themselves in the situation of nearing their retirement age with a parent or other elderly loved one in need of expensive care. This poses financial problems for your retirement as you may end up with large unexpected costs that can at the very least delay your retirement goals. If you have older loved ones that may require care like this, you must account for this in your retirement plans as well.
There are also hidden economic factors that will impact your retirement. One economic factor that could have an effect on your retirement is the federal deficit. As our nation’s debt continues to grow, politicians are looking for ways to reduce it. This means the government needs money and you can guess where that money will come from; taxes. This means that all the money you have saved away for retirement could be getting taxed at a much higher rate when you finally withdraw on it. Another economic factor that could adversely affect your retirement is inflation. Although inflation doesn’t have a huge impact on your retirement each year (typically estimated at 3%); this can quickly add up over the time it takes you to reach your retirement age.
Taking into account the basic factors that influence your retirement such as when you start saving and how much you are saving; you can determine roughly when you will want to retire. However, there are also several hidden factors that can affect and change this. By taking into account all these various factors and planning accordingly, you can protect your retirement investment and be sufficiently prepared when the time comes to retire.
About the author: Louis Mack is a financial adviser with years of experience in retirement planning. When he’s not writing about how to develop an achievable retirement plan, you will find him in the mountains on his favorite hiking trails.