Do you dream of freedom in your golden years? Traveling, laying by the pool, golfing?
Hopefully you're not following your grandfather's playbook.
According to Jim Dew from Dew Wealth Management in Scottsdale, retirement planning has changed drastically in the past few decades. He suggests keeping these five things in mind if you want to retire comfortably.
1. There's no safety net
"It used to be you had social security, which in 1985, it made up 65 percent of the retiree's income," said Dew. "Today it only makes up 27 percent. Then there were pensions, which are virtually gone today. Only 19 percent of companies actually have pensions."
2. The extra decade
"In 1985 the average man was going to live for 14 years after retirement, the average woman 19 years," Dew said. "Today, the average man lives 26 years into retirement, the average woman 29 years. So there's another 10 years you have to plan for, which means you have to save and invest a lot more than you used to have to save and invest and retire comfortably."
3. The single factor
"Marriage has been on the decline since 1980 and being retired as a single person is much harder if you think about the finances," he said. "It costs the same amount of money to air condition a home whether you have one or two people living in there, plus you don't have the spouse to lean on for retirement decisions."
"Debt has been on the rise and even worse is student loan debt," Dew said. "It's approaching 1.2 trillion. People need to stick to a budget and have a plan to get rid of their debt. Being retired with a lot of debt makes it very challenging."
"Fidelity has said in a recent study the average 65-year-old couple is going to spend $260,000 on healthcare when they're retired," said Dew. "You have to plan for that. In addition, there's long-term care cost. Around 70 percent of retirees are going to need long term care of some kind and Medicare and Medicaid do not cover it."
Dew suggests future retirees get debt under control. Then start working on how much you need to save and make it part of your plan.