For many years, retirement planning seemed like setting goals for much later. Maybe it even seemed too far out to be taken seriously. But now you are ten years out from your anticipated retirement date, and things at this stage begin to take a different shape than your earlier years of planning. Here are the steps you need to take to plan for a healthy and happy retirement:
Assess the Situation:
Even if you have never done any retirement planning, ten years still provides time to save adequately with the right strategies and discipline. But you need to begin by determining the full range of savings that you have set aside for retirement, including IRA and 401(k) accounts. Your assessment should not include things like emergency accounts or money set aside for purchasing a car or discretionary spending.
While most of your income during retirement should come from your savings, you may have additional sources, such as a pension or Social Security.
Plan Your Lifestyle:
You may have some assumptions about what retirement might look like, but it’s time to attach a budget to those ideas. Maybe you pictured yourself on the golf course or traveling across Europe for part of each year. You might want to move across the country to be close to family or maybe you’ve decided you’ll be happiest in your garden at home. It’s important to have a solid estimate of what your monthly expenses will be and whether there will be any one-time investments that will require some planning.
Close the Gap:
When you compare your retirement savings and additional income with the estimated expenses you anticipate, you may have a shortfall. You can address this in a number of ways, but a good first step is to be sure that your portfolio is designed with the right level of risk and growth opportunities. You can also determine whether you are taking full advantage of options like matching contributions to a 401(k) that your employer may offer. If you’re over the age of 50, you can use catch-up contributions to deposit more cash into your IRA in your years before retiring.
You can also focus on paying down debt. Most people would be excited to find an investment that paid 15%, but they don’t consider what 15% interest is costing them on a credit card.
Consult an Advisor:
With only ten years to go, you will want to be sure you are on track to enjoy the kind of retirement you want. A financial advisor can help you consider all angles of your portfolio and how it can be best structured for the final years of retirement planning.
Contact us at Heritage Investments to talk about your retirement planning strategy. We can help you think through your current situation and discuss strategies for closing any gaps. Let’s create a plan to get the retirement you envision.