Your Money: Your easy 5-point retirement checklist

Time and again we hear people say that their biggest retirement fear is running out of money. It’s an understandable concern. With increasing lifespans and higher health care costs, retirement is often longer—and more expensive—than it used to be.

Planning ahead will go a long way in feeling more confident to take on a retirement that may last upwards of three decades. If you’re thinking about retiring within the next few years, now is the time to get your financial ducks in a row. Here are our top tips to help ensure you’re prepared.

ENVISION YOUR NEW LIFESTYLE

Taking the time to think through the realities of your retirement lifestyle helps you align your values (what’s most important to you) with your financial goals. If your ideal retirement consists of living in your current home, tending to your garden and volunteering at your local library, your financial needs will likely be very different from someone who seeks to spend their retirement visiting the world’s best 5-star resorts. Your financial plan should be constructed to reflect those differences in lifestyle.

OPTIMIZE YOUR EMPLOYER BENEFITS

We encourage you to scrutinize your employer benefits in the years leading up to retirement. Items to consider: Have you updated your 401(k) to include the “Catch-up” provision that allows workers 50+ to contribute an extra $6,000? Does your company offer special post-employment benefits (airline, retail discounts)? Are your employer-sponsored insurance policies portable? Are they worth the additional expense?

PROFESSIONALIZE YOUR INVESTMENT STRATEGY

Over last 15 years, the S&P 500 returned 8.19 percent annually. If you invested $100,000 and earned that 8.19 percent, you’d have over $325,000. The average equity investor over the same period only earned 4.67 percent, giving them $198,000 if they invested the same $100,000. Why are they underperforming? There are a number of excuses, such as loss aversion, denial and falling under the spell of media influence. We believe the best way to avoid behavioral mistakes is to offload investment management to an objective and professional third party like a financial adviser.

EVALUATE YOUR RETIREMENT SPENDING PLAN

To avoid running out of money, it’s important to not only reach a savings goal, but also chart out what your spending may look like. This is where the value of a financial adviser with expertise in retirement income planning comes in. Based on your family history, health, savings, and other factors, we can help determine an appropriate time horizon and average withdrawal rate for you— and we can suggest small changes that may extend your savings.

SEEK OUT TAX EFFICIENCIES

One of the surest ways to keep more of your hard-earned money is to employ tax planning. If your savings and investments aren’t divided into taxable, tax-deferred and tax-free categories, you probably aren’t minimizing your tax burden — which means you could end up paying more in taxes than you really need to. Enlisting the expertise of a tax planner could help make the most of your money.

You’ve worked hard for your retirement; you deserve to enjoy it. Following these five points will not only help you seek a more comfortable retirement, it’ll also help assuage any concerns you have about a lack of preparedness.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indexes are unmanaged and may not be invested into directly.

Source: http://www.twincities.com/2017/08/12/your-money-your-easy-5-point-retirement-checklist/

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