Retirement planning is not only financial.

Retirement planning is more than analyzing your expenses and investment accounts. It is a deeply personal journey of who you are, what you like to do, and what type of legacy you wish to create. Retirement planning has a financial component, but before you gather all your bank statements, first collect your thoughts.

What will you do after you retire?

You can only begin to determine the financial considerations and how much money you will need to fund the lifestyle you want once you have answered the question above.

A good starting point for retirement planning is looking at your parents and grandparents. How long did they live? While your genetic propensity to longevity is beyond your control, life expectancy calculators may be useful in projecting how long your money needs to last. As lifespans increase, savings accounts need to be stretched further.

While an “end date” to your retirement plan may seem disconcerting, consider adding several years to actuarial projections to make sure you don’t outlive your money. Indeed, Prudential’s recent ad campaign asserts that people with life expectancies of 150 years have already been born. Living long not only means many birthdays surrounded with family and friends, but also means more chances for unexpected expenses and unanticipated events that can potentially derail even the most carefully made plan.

As you prepare for retirement, flexibility, discipline, and financial calculators remain your best tools.

Retirement remains an elusive dream for many workers. However, proper planning can help bring the dream into reality. Economic insecurity and worker confidence levels aside, the fact is that many retirees find themselves retired earlier than anticipated. Either poor health or work conditions beyond their control impose a retirement date.

While you can’t control the unexpected, you can control your response. Proper retirement planning can pave the path to make the next stage of life as rewarding as possible, making sure you have the funds to do what you want to do.

For more reading about your retirement, download a free copy of The Retirement Planning Book.

Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.

Published January 5, 2015.

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