Here's a not-very-surprising secret: People in their 20s, 30s, and 40s don't actually think about planning for retirement all that much. Paying for a child's education, saving for a down payment, and paying off student loans often take top priority.
The good news is that you can manage your spending and build paths to all of your goals—including retirement—with a financial plan. A clear and specific roadmap can help you reach all of your goals more efficiently and put your future retirement in perspective with the rest of your life.
This 4-step process can help you envision your retirement goals.
1. Who are you planning for?
When you picture yourself in retirement, who do you see with you? Relationships often play a key role in people’s lives and in their financial priorities. How do you see your relationships in the future and what do you hope to provide? The answer will be different for everyone.
Maybe you’d like to have a beach house where your family can gather or to pay for part (or all) of your grandchildren’s education. Your vision could be leaving a legacy for future generations or to causes you believe in. Or perhaps you’d just like security in retirement and want to know that any of your health care needs will be taken care of.
Knowing what, and who, is important to you, can help you better understand how much you may want to save and your time frame.
2. What do you want to do in retirement?
For some people, retirement means saying goodbye to work and getting there as soon as possible is the priority. On the other hand, you may not see yourself retiring at all but want the option to switch to a less demanding job.
Thinking about how you might spend your day-to-day life in retirement can help you understand what your expenses may be. Knowing how much you may spend can help inform your saving and investing strategies. It will also help you decide when you can retire.
Don’t forget to include health care costs in your future retirement expenses. They can be a significant chunk of your retirement spending.
Read Viewpoints on Fidelity.com: How to plan for rising health care costs
3. How does retirement fit in with the rest of your goals?
It's very likely that retirement won't always be your top priority. For instance, maybe you want to buy a new home in a great school district: It could increase your quality of life, improve your children's educational prospects, maybe it even provides a better commute to work—all perfectly understandable.
It all comes down to balancing your spending today with savings for your short- and long-term goals. Planning can help you strike that balance and set a trajectory toward what you want to do in the future while living your life now.
You don't have to do it on your own. A financial professional can help you prioritize your goals or come up with strategies to catch up if you do need to put retirement on the back burner.
4. Are you on track to hit your goals?
The next step is to go from blue-sky dreaming to rolling up your sleeves: It's time to get tactical.
Think about your current lifestyle and how your expenses in retirement could grow or shrink. Get specific with your estimates. Think about who you may spend time with in retirement and what you may be doing. For example, if you want to travel in retirement, think about how many trips you might take per year and how expensive they may be.
Estimating how much you may spend on an annual basis can help you see if you're saving enough now. You may want to save more or make a note to increase your retirement contributions when you get a raise or when you've reached one of your shorter-term goals.
Time is a key ingredient in building retirement savings. The more you're able to save and invest early on, the more time you'll have for your money to potentially grow—and the better off you may be in retirement. If you choose to save less now, consider these 3 choices: Save more later, work longer, or spend less in retirement, or some combination of the 3 options.
There may be a fourth option as well: continuing to work in retirement. You may not work full time but many people continue to work in some capacity even though they officially consider themselves retired.
To learn about Fidelity's retirement guidelines, read Viewpoints on Fidelity.com: Retirement roadmap.
Planning is key because it gives you choices. Few things in life go as smoothly as you would like—retirement planning included. You can successfully save for retirement even if it's not your highest priority all the time. A flexible plan can help you make informed decisions about what you want now and what you'd like in the future. As your needs evolve, so can your plan.
Even if you're not quite on track to hit your retirement goals right now, knowing where the finish line is can help you find ways to get there.
Find your finish line
It's much harder to run a race when you don't know the terrain or the finish line. Taking the time early on to determine what your retirement expenses may be and when you may be able to retire can help show you a finish line in your retirement-saving marathon.
Once you have a rough idea of your expenses in retirement, it's time to create a plan. Consider using our free retirement planning tool to help you see where your retirement planning stands now, how much money you may need in retirement, and what steps you could take to get there. You can also explore when you may be able to retire and see how some small adjustments could change your trajectory.
Envisioning your retirement may take time but it's worth it. It can seem overwhelming but taking action and working through the process one step at a time can help you feel in control and confident that you're on the right track.