5 Signs You’re Headed for a “Cushy” Retirement

David Nilsen |

How much do you need to retire wealthy?

Believe it or not, there’s no set number for anyone.

Lifestyle and the quality of your retirement plan are certainly two big factors.

But when considering the economy and inflation, a definitive picture of our financial future can feel somewhat elusive.

So, to shed a little light (and provide a little guidance), here are a few telltale signs you might be set up for a “comfortable” post-work lifestyle.

Will I Retire Wealthy? These 5 Signs Point to YES

No matter when or where you retire, you could be in for a rich life—for the rest of your life—if the following describes your circumstances.

1. Minimal or Zero Debt

The less debt you have when you’re retiring, the better. That can mean more financial freedom and more flexibility to use your retirement income for real estate, healthcare, and hobbies.

Keep in mind that financial freedom in retirement isn’t just about eliminating debt. If you’re financially supporting children or other loved ones as a retiree, it could have the same impact as carrying personal debt into retirement.

Tip: Pay down as much debt as possible before you retire, from mortgages and car loans to credit cards and beyond. Consider downsizing, relocating, and/or making other lifestyle changes to reduce your debt and bolster your financial footing ahead of retirement.

2. Strategic Savings

Rich retirements often stem from strong savings, and those savings can consistently grow with proper automation. That means finding the most effective strategies, frequencies, and amounts for automating transfers into retirement savings accounts.

So, if your savings are on autopilot, with consistent contributions into your retirement account(s), you could be on the right track to a wealthy retirement.

Tip: Consider earmarking bigger “windfall” payments (or portions of them) for your retirement savings. For instance, create a “rule” that 10% or 25% of your yearly tax refunds or annual bonus payments go straight to retirement savings.

3. A Clear Budget

What’s the minimum monthly amount you need to maintain your current lifestyle in retirement?

Have you considered generating more income during retirement? Or are you expecting to?

Many people can’t answer these questions before or even in retirement. Which, unfortunately, can lead to overspending and a very tight wallet.

Tip: Dial in your budget for retirement as soon as you can. Also, establish a “check-in” period for yourself, so you’re reviewing the numbers at least once a year and making any adjustments, if needed.

4. Little Reliance on Social Security

The less you need to rely on Social Security, the richer you may be in retirement. Generally, wealthier retirees have multiple income streams in retirement, with Social Security as just one source of money that’s supplemented by 401(k)s, pensions, annuities, and/or other income.

Tip: Diversify your retirement income as much as you can, so you have a little more insulation from risk, market volatility, and inflation.

5. Solid, Growing Financial Literacy

Your understanding of finance can go a long way toward setting you up for a blissful life in retirement. That’s because financial literacy can result in prudent choices and a more balanced perspective. It can also give you a much stronger sense of how long retirement could last and how to plan for a happier, richer post-work life.

Tip: Look at financial literacy like your retirement savings—it’s an asset that should keep growing if you’re serious about enjoying a wealthy retirement.

A Better Way to a Richer Retirement

Wealth takes work. But it’s never too late to make changes today for a more comfortable future. 

Whatever your dream retirement may be, a financial professional can help you build a more solid foundation for enjoying a luxurious and more fulfilling retirement.

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2024 Advisor Websites.