Which Retirement Lifestyle Is Right for You?

It might seem like a long way off, but the day may come when you'll want to work less or not at all. It's never too early to start thinking about how you'd like your retirement to look. And the more details you can fill into that picture, the better your chance of saving enough to turn it into reality.

You can use a retirement calculator to estimate your savings goal. But first, you'll need a good idea of the retirement you want and how much it's likely to cost.

Here are three common scenarios to consider.

Many people see themselves living more simply and spending less in retirement. In some cases, a smaller nest egg can work. But living comfortably on less money takes planning. And your expenses might not drop as much as you think.

According to data from the Bureau of Labor Statistics, housing is likely the largest expense you'll face in retirement, so reducing those costs can have the biggest impact on your budget. Relocating to a less expensive area or downsizing could help greatly with this. If you want to stay put, planning to pay off your mortgage before you retire is another way to reduce monthly expenses.

You could also look to spend less on transportation, the second-highest cost for most retirees. For example, if you live close to amenities or public transportation, you might be able to forego owning a car altogether.

Health care is another essential expense to plan for. Costs can vary greatly from person to person. But setting aside money in a tax-advantaged health savings account (HSA) and living a healthy lifestyle may help you save on medical care. Note: You must be enrolled in a high-deductible health plan (HDHP) to be eligible for an HSA.

Maybe you want to try something new in retirement, like going back to school or pursuing a passion. Or maybe you just want to relax more without giving up your career completely. The choice is yours, as long as you budget for it.

If your plan is to further your education, you'll want to account for tuition along with your living expenses. But you might not need as much as you think—many colleges offer free or reduced tuition programs for retirees. And what you learn could lead to a second career and additional income.

Many retirees choose to keep working in retirement, whether in their current field or a new one. You could work fewer hours for your employer, turn a hobby into a business, or take a part-time job doing something you love. Besides income and possible medical benefits, working can provide social connections and a sense of purpose.

Volunteering for a charity in retirement could be similarly rewarding. You won't earn a salary but you might get other perks, such as discounts or access to social and cultural events.

Many retirees not only seek a complete break from work but also want to do all the things they put off while they were working. Traveling is a big one, whether it's to see the world or far-flung relatives.

The key is to go big with your planning and get as specific as possible about your goals. How many trips do you see yourself taking? Where would you like to go? How would you like to travel? Once you have an idea, add up the potential costs.

Including them in your retirement savings plan now can increase the odds that your retirement budget will match your wanderlust when the time comes. 

Your retirement is full of possibilities. You can take charge of them now by taking time to ask yourself some important questions:

• How much do I see my life changing in retirement? What do I want to do?
• How much is my lifestyle likely to cost each month?
• Will I stay where I am or live somewhere else?
• What expenses should I plan for, given my retirement needs and goals?

The sooner you know the answers, the sooner you'll know what you need to do to make the retirement you want a reality.