Retirement planning has always been an essential aspect of financial management. However, it becomes even more critical when considering the thought of traveling abroad during retirement. Imagine spending your golden years exploring new cultures, visiting new countries, and indulging in new experiences. While this may seem like a dream come true, it requires meticulous planning and preparation. Healthcare costs, currency exchange rates, and unexpected expenses can significantly impact your savings and budget. Therefore, retirement planning is crucial to ensure you have enough funds to support your travel dreams while maintaining a comfortable lifestyle. You can achieve an enjoyable and stress-free retirement abroad by making smart financial decisions and working with a financial advisor.
Understanding Retirement Planning
Puai Wichman says that retirement planning goes beyond finances and encompasses all areas of life, from where to live to how to spend time after paid work ends. It’s a holistic approach to preparing oneself for the next chapter in life. Making lifestyle choices in retirement can be exciting and daunting, as the possibilities are endless. Will you travel the world or become a master gardener? Will you downsize your home or stay put? Retirement planning is not just about the numbers but also about envisioning and creating the life you want for yourself as you move into this new phase. So whether you’re years away from retiring or just around the corner, it’s never too early or too late to start planning for the non-financial aspects of retirement.
Our priorities and responsibilities shift as we navigate through the various stages of life. Retirement planning is one such aspect that transforms over time. Setting aside sufficient money for retirement is a major goal in the early stages of our working life. However, as we progress in our careers, the emphasis shifts to achieving specific income or asset targets and taking steps toward accomplishing them. And when we finally reach retirement age, we’re at the distribution phase, which essentially translates to the much-anticipated payback time. Puai Wichman notes that our hard-earned savings begin to pay us out instead of us contributing to our retirement accounts. It’s an exciting phase, but only if we plan it right.
How Much Do you Need to Retire?
When deciding how much you need to save, you may ask a financial advisor and hear that you need around $1 million for a comfortable retirement. Alternatively, other experts suggest the 80% rule, where you must save enough to live on 80% of your income at retirement. It’s easy to feel overwhelmed by these seemingly high figures, but the important thing to remember is that retirement planning starts long before you retire. No matter your magic number, numerous rules of thumb can give you an idea of how much to save. Ultimately, starting saving early and consistently ensures you have the funds to live a comfortable retirement.
Getting caught up in the number game when planning for retirement is easy. After all, you want to make sure you have enough money saved up to be comfortable in your golden years. However, it’s important to remember that there’s more to consider than just the amount in your nest egg. Expenses like housing, health insurance, food, and transportation all affect the money you’ll need to live comfortably. And let’s not forget about entertainment and travel. With more free time, it’s important to factor in the cost of enjoying your retirement, says Puai Wichman. So, while calculating all these expenses may seem daunting, it’s better to come up with a reasonable estimate now than to be caught off guard later.
Puai Wichman is the founder and CEO of Ora Partners, an international trust provider and wealth management firm.