How to Create a Simple Retirement Plan

You know the old saying about failing to plan means you’re planning to fail. The same goes for retirement. If you don’t make a plan, you may never get to retire. And if you don’t have a vision of what your retirement years will look like, you’ll likely drift through your senior years … and then wonder where they went.

Remember, a plan is just a projection. It does not have to be complicated or particularly thorough. It does not have to be written in stone, though it should be written down somewhere. It can change. You can adjust it, adapt it to different circumstances or to new ideas you develop as time goes on. But if you have a plan, you at least know where to start and how to make adjustments to meet your new needs as retirement marches on.

Here are five simple steps to formulate a retirement plan — and they work whether you’re 55 or 75.

1. Think about what you want the rest of your life to look like. Are you playing golf or lazing around on the beach? Are you volunteering for your favorite cause or babysitting your grandchildren? Are you pursuing a long-held dream to start a business or pursue an interest in photography or crafts or lifelong learning? Of course, you can always do more than one thing, especially of you’re young and active and in good health, but no matter your circumstances, what you want to do in large part determines where you want to live, what your relationships are and how you spend your time. Just like a good paint job begins with preparation, a good retirement begins with your clear-eyed vision of what makes you happy.

2. Where will you live? Most retirees retire in place, meaning they stay in their old family homes or move to smaller quarters in a nearby neighborhood. But if you dream of sand and surf or of starting a new life with your distant grandchildren, now is the time to make your move. If you live in an area with a high cost of living, in California or New York for example, you may want to research states with lower taxes and lower overall expenses. If you dream of traveling in retirement, you may not need to keep your expensive old home and would be better off living in a condo, possibly within a half-hour drive of a major airport.

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