Retirement is something most Americans look forward to but many are not ready for.


Although preparing for retirement takes time and organization, many do not begin planning for the day they stop working until later in life. While it is still possible to retire after planning later in life, retiring comfortably often requires years of saving and investing.

Whether you choose to retire in your current home or in a foreign country, making sure you have saved enough to retire without a decrease in your quality of life is important. The cost of retirement differs by location and lifestyle. Planning for retirement is more than contributing funds to a 401(k) or an IRA. Knowing what your retirement goals are, as well as what health care costs you might face, are also important steps in the retirement planning process.

Retiring Comfortably

Though each person has a different retirement goal, most workers look forward to being comfortable once they are no longer working. A comfortable retirement means having enough money saved to lead whichever kind of lifestyle is preferred. Depending on what an individual envisions for her or his retirement, as well as any foreseeable health care needs, she or he can set a specific goal and make a financial plan for attaining it.

Setting money aside every paycheck is the most common way to save for retirement. Employer-offered retirement plans are one of the best ways to save for retirement. Many employers match a portion of an employee’s contributions to the account, which can help bolster retirement savings. Most employers offer retirement plan options like a 401(k) or 403(b), but there are also options outside of the plans offered through employment.

Those who are self-employed or are not offered employment-based plans have other options for retirement savings. Individual retirement accounts, more commonly known as IRAs, are a popular kind of investment account used to save and earn money for retirement. There are several kinds of IRAs, each with different terms and methods of taxation.

Though it is best to contribute to retirement plans such as these early on in a career, it is also possible to start saving for retirement later in life. While it requires some hard work and dedication, building a retirement fund later in life does not have to mean sacrificing quality of life during retirement. Many retirement plans allow catch-up contributions to be made late in a career. Delaying retirement for a few years also offers a little more time to contribute to retirement funds while cutting the length of a retirement. Making certain lifestyle changes can also help save money that can then go into a retirement account.

Retiring Abroad

Spending retirement exploring the world is a dream many have but few know how to prepare for. Retiring abroad comes with its own set of concerns that every person planning on retiring outside of the country should consider. However, retiring abroad can be a great opportunity to see different parts of the world or engage with people of another culture.

Choosing the right location is the most important part of retiring in a foreign country. Residing in another country is not the same as vacationing there, so there are certain factors to take into account if you are considering retirement abroad. Living in a country long term requires more than just a tourist visa, so you will need to become familiar with any residency and homeownership restrictions a country has placed on foreigners.

Certain countries welcome retirees looking to make a permanent move, but others have restrictions that may make retiring there difficult. Checking with an American expatriate community in a foreign country is a great way to gauge what living in that specific country as a foreigner is like.

Another major consideration to make when retiring abroad is money. Retiring means living on a limited income, so it is important to make sure you can afford to live in the country you wish to retire in. Some countries may offer a great exchange rate on cash if the value of their currency is lower, but a country whose currency is higher in value means a higher cost of living. The cost of health care in a country should also be considered, especially since health care becomes increasingly important as you age.

Learn About Social Security Retirement Benefits

For many who are no longer working, part of the retirement process will involve collecting Social Security Retirement Benefits. Social Security pensions are, for many retirees, a main source of income once they no longer have a job. As of 2018, once a retiree has reached the age of 61 years and 9 months, he or she may apply for Social Security Benefits.


While applications are submitted up to four months before an applicant wishes to start receiving benefits, the longer benefits are delayed, the larger the amount paid out will be. Those who apply for Social Security Benefits when they have reached full retirement age are eligible to receive their full benefit amount. Inversely, those who begin receiving benefits before they reach that age will receive a reduced benefit amount.

Retirement Plans

When preparing for retirement, knowing when and how to choose a retirement plan can be the difference between retiring well and having to sacrifice during retirement. There are many different kinds of retirement plans available, some depending on an employee’s work situation.

The most frequently used retirement plan is the 401(k), which is typically offered to employees by their employers. Those employed by state or federal governments, nonprofit organizations and school districts typically have 403(b) retirement plans. The 403(b) is similar to the 401(k) but tends to have lower administrative costs.

Those who do not have a 401(k) or 403(b) as an option or who want to supplement their retirement contributions also have the options of choosing an individual retirement account (IRA). IRAs allow plan holders to make contributions to the account. There are two main kinds of IRAs: traditional IRAs and Roth IRAs. Both differ in a few ways, but the most important difference is how taxes work on each. Traditional IRAs have taxes deducted from the amount held at the time funds are withdrawn, usually at retirement. Roth IRAs, however, are taxed as contributions are made and are therefore tax-free at the time of retirement.

Pensions are another form of retirement plan offered by some employers. Government agencies and organizations typically offer pensions, as do some large companies. Employers make contributions to an employee’s pension plan, which will pay out monthly once the employee has reached retirement age. The amount a pension plan pays depends on the age of the plan holder, how many years were worked with the company providing the pension and the yearly salary that was earned.


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