Skip to main content

How to Create a Simple Retirement Plan

By U.S. News & World Report

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.

[See: Your 10-Step Checklist to Retire in 2018.]

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.

[Read: Your Financial Checklist for Retiring to a New City.]

3. How will you develop your retirement interests? If you already have a hobby that you want to pursue with more intensity in retirement, all you have to do is focus the extra time and energy you now have to your chosen field. But there are copious opportunities to find new interests or develop new skills. Many communities have senior centers that offer classes in photography, art, language and history. They also offer activities ranging from ping pong to pickleball to pinochle. Several national organizations, such as the Center for Learning in Retirement, the Collegium for Lifelong Learning and the Osher Lifelong Learning Institute, offer a wide array of courses, often through your local university. For the most part, these programs require no entrance exams, no tests and no grades. They exist to help you explore new fields and develop new skills.

4. How will you finance retirement? It’s never too soon to start saving for retirement, but it’s never too late to assess and organize your resources and set up a solid foundation for your financial future. Figure out what your assets are, including any big-ticket items you may want to sell in the near future (a vacation home, a boat or that extra car you may no longer need). Identify where your income will come from — including Social Security, a pension if you have one, IRA or 401(k) withdrawals and any other source of monthly income. Don’t forget to account for taxes. And beware the biggest drains on your retirement money: spending too much on a big house, giving too much money to your kids and getting carried away on the carpet ride of travel.

[See: 10 Costs to Include in Your Retirement Budget.]

5. Write it down. A goal without a deadline is just a pipe dream. A plan that exists only in your head is just wishful thinking. Write your retirement plan down on paper or in a computer file. Be as specific as you can, but also give yourself alternatives and deadlines. If you want to go fishing, are you going to need a boat? Move to be near the water? Outfit yourself with the proper supplies? Who are you going to go fishing with? You may not have all the answers, but once you’ve written down a plan, you know where to start, you can do some research and talk to your family and friends, and you can actually achieve what you want to accomplish.

Tom Sightings is the author of “You Only Retire Once” and blogs at Sightings at 60.

More from U.S. News

How to Save $1 Million by Retirement

10 Ways to Get Ready for Retirement After Age 50

How 3 Minimalists Slashed Expenses for Retirement

How to Create a Simple Retirement Plan originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote