We live in an increasingly complex society.

Nowhere is this more true than retirement planning. If complication isn’t your thing, then here’s a simple overview of the retirement plan process.

1.Design Your Dream Vision

The first step in retirement planning is figuring out what yout vision for retirement is.

Are you going to vagabond the world with a backpack, travel the open road in motor-home, or stay at home and read novels or play cards? your vision for retirement is the necessary starting point because it will determine how much your retirement will cost.

You need to have at least a rough outline for your dream life in retiremnet or you can’t complete the following steps, which include budgeting and planning.

2.Pick Your Retirement Date

Once you have a picture in your head of your ideal retirement, it’s time to pick the date you’ll start living it. The reason this step is essential is because your pending and social security distrubution will vary depending on your planned retirement date.

Your heathcare costwill also depend on if you qualify for Medicare or not.

3.Estimate What It Will Cost 

Now that you have a dream vision for retirement and a date to begin, it’s time to estimate costs and revenues to see if you’ll have enough money. The first step in this process is to guesstimate how much your plans for retirement will cost, so make a budget. Be overly generous in your estimates because inflation and all the stuff youinevitably forget to include will cause you to underestimate anyway. Round up where you can and use your current expenses as a benchmark to adjust from.

4.Estimate Savings Required

Now it’s time to estimate the amount of savings required to live your retirement dream.

You do this by matching your projected income to your estimated expenses following these four simple steps: Add your estimated Social Security and defined benefit pension payments together based on your projected retirement date from Step 2 above.

Based on this step, you now have a savings goal to achieve by your retirement date. All that’s left to do is build a savings plan to achieve it.

5.Build A Savings Plan

Take the shortfall estimate from Step 4 above and subtract your current savings and retirement plan balances to determine your current savings shortfall. Conversely, you may choose to revisit your dream vision and corresponding budget if the savings goal is too daunting. In other words, the retirement savings shortfall can be made up by saving more or figuring out how to live happily on less– they’re mathematically equivalent.

Some people find happiness on $24000 per year and need little saving while others need $240,000 per year. There’s no right or wrong answer, but it’s important to note for every $10,000 per year less that you need to spend, you lower your savings required by roughly $250,000.

6.Invest the Savings

This is the toughest step to reduce down to a sound-bite paragraph because a wall of books would still leave gaping holes in the knowledge required. Highly educated professional botch the investing process and neophytes are at even greater risk.