Many people think of retirement as a future paradise. A magical time to do whatever you want. A final destination that includes freedom, travel, grandkids, happiness.
So how do you GET there? What do you do once you ARE there?
Retirement Readiness
First, you need to determine your financial and personal goals for retirement. What does your vision of retirement look like? Will you travel? Will you begin a new career? How much do you need to contribute in order to bring that vision to fruition?
Traditionally, people have relied on Social Security and employer pensions to support them throughout their retirement years. However, today we’re faced with cutbacks in benefits, rising costs and even government budget uncertainty. Plus, the average lifespan continues to increase.
How much income will you need when you retire?
Strategy
Let’s fine tune a strategy that reflects your long-term objectives, risk tolerance and time horizon. Stay actively engaged with your retirement strategy. Make changes necessary to continue synchronizing your portfolio with your vision.
Maximize Your Retirement
When you’re in the early stages of your career, invest as much as possible into your retirement. Take advantage of compounding interest. Solidify good saving and spending habits. You’ll likely have more disposable income and fewer bills associated with mortgages and children than in later years. Take this opportunity to pour money into your savings and retirement accounts.
Successful portfolios take time to grow. Understanding market volatility can help reduce the likelihood that you’ll react impulsively when markets take a dip.
In your 30s and 40s, SAVE, SAVE, SAVE. Make investing a priority. Don’t wait! Start to contribute to an employer-sponsored savings plan now, if you haven’t already. Consider drafting an estate plan – especially if you have young children.
In your 50s, set a desired retirement age. Review your investments more regularly. If you’re behind on meeting your goals, take advantage of catch-up contributions and invest more into your retirement savings plan. Start to cut back your overall spending. Consider downsizing to a smaller home when your children move to another location. Invest the surplus into your retirement. Research Social Security, Medicare and long-term care insurance. Make sure to account for rising health care costs and inflation.
In your 60s, envision what retirement looks like for you. Start to reduce your debt level. Build a withdrawal strategy to replace income when you stop working. Determining how much and when to withdraw money from your investment portfolio is critical to pursuing your long-term income needs. Successful planning can help prevent overspending in the early stages of retirement. You don’t want to experience a shortfall in your later years.
In your 70s and beyond, continue to re-balance your portfolio. Be aware of minimum distribution requirements to avoid paying high penalties. Solidify your estate plan.
Summary
Successful retirement planning is about asking the right questions and having a trusted advisor who can guide you through the planning process.
You can’t afford to play games with your retirement assets. Let’s work together to establish – or refine – an investment strategy to match your retirement goals. We can help make your financial future easier.
Please pass this article along if you know someone who may benefit from retirement guidance.
