We all have dreams about what retirement could look like. Those dreams inspire us and give us hope. However, without a plan, all those dreams could become nightmares.
I want to help you start on the path to your retirement dreams. Here are five quick tips to make sure you retire inspired.
- Understand what your dream is. This is the first step. What do you want to do during retirement—what is your dream? Do you want to travel? Spend time with family? Sit on the beach? If you are married, you and your spouse need to have a dream meeting to discuss what you want your retirement to look like.
- Determine your financial number. Start by identifying how much it takes to live right now—your monthly budget. Then calculate how much you think you would need to live your dream retirement. Consider the impact of lingering debt on your budget. I developed a free tool called R:IQ* to help you determine your financial number. The R:IQ will take into consideration any money you already have invested in a 401(k), IRA or other account.
- Understand where you are now and what you can do to help your situation. This is where you start to make your retirement dreams come true. Your R:IQ number gives you a goal to work toward. Now you know where you are headed and what it will take to get there. Identify money weaknesses (such as debt) and places where improvements could be made (such as working extra). Then activate your plan, making conscious decisions to sacrifice or give up some things so you can invest in your dream.
- Keep your lifestyle in check. The things that will derail your retirement dreams the fastest are your own decisions. Too many people celebrate getting a raise by going into more debt with a new car payment. Here’s a better plan: look at what your raise could do to help you get out of debt or to increase your investing.
- Make five-year decisions. When you make decisions, look at how you’ll feel about them in five years. You will not only slow down and realize the impact of your financial decisions today, but you will also begin to recognize the impact on your retirement dream.
*The R:IQ tool can be found at www.MyRIQ.com.