4 Steps To Take Right Now To Ensure Your Retirement Is A Success

One out of every five Americans are still working or seeking work at the age of 65 or older. 

Although there are many reasons for the delaying of one’s retirement, one of the main causes of a delayed retirement is failing to plan in advance to ensure you have the right amount of assets saved to support your retirement goals. 

Rather than spending time worrying if you are on track for retirement, it is far more productive to use your time to create a solid retirement plan, so you will have peace of mind knowing that you are financially secure in your golden years. 

I want to empower you with the tools you need to create a successful retirement plan. These are four essential steps you can take immediately to get started. 

1. Start with designing your ideal retirement plan:

In the same way that you wouldn't just hop on a plane without a specific destination point and a roadmap to get there, when preparing a retirement plan it is crucial to start with a specific destination point, followed by a detailed “roadmap” for reaching it. 

Developing an effective "roadmap" starts with designing what your ideal retirement goal looks like. This includes information, such as, when you would like to retire, where you want to live in retirement, and what you intend to do in retirement.

1. Determine how much money you need to save for retirement:

After you have created a vision for what your ideal retirement will look like, you can decide how much financial resources you will need in your retirement accounts to achieve your retirement goal. 

It is recommended that you plan to replace 80% of your pre-retirement income each year through your retirement planning. However, keep in mind that this number does not include other things you may want to spend money on, such as, travel. Another additional expense that is important to factor in is medical care. The average couple will need around $300,000 after taxes to cover medical expenses in retirement. That number does not include long-term care.

When planning how much money to save in your retirement accounts in order to reach your retirement goals, it is also important to consider your projected retirement lifespan. While nobody can predict their life expectancy to an exact degree, one can take a look at averages. According to Social Security, the average 65-year-old man can expect to live another 18 years, to 83 and the average 65-year-old woman can expect to live another 20.5 years, until 85 and ½. People often underestimate how long they will live in retirement, which can create problems for their retirement plans. If you want to be on the safe side, you should plan on living for 25 years after retirement.

1. Take inventory of your retirement assets:

After you have determined how much money you need to set aside to achieve your retirement goals, you should take an inventory of your assets and liabilities. You will want to write down every debt, liability, savings balance, income stream and any insurance policies you have. 

To accurately manage cash flow and determine how much to save for your retirement, create a timeline of when your different streams of income will kick in. Some areas to check would be your Social Security account, employee-sponsored retirement accounts, individual retirement accounts. It is important to calculate each income in post-tax dollars.

Once you have all the information, a retirement calculator can help you determine the remaining gap between your savings and how much you need for retirement. Then you can create a plan of how much money you will need to put away each month to achieve your retirement goal.

At least once every five years, an inventory should be taken of your assets to see if you are on track to achieve your retirement goals, or if you see you are straying off course, make any necessary course corrections to ensure that you will achieve your retirement goal.

1. Build an emergency fund.

The creation of an emergency fund is crucial when it comes to financial security and protecting you in case of unexpected circumstances. Putting away at least six months of living expenses should be sufficient to cover you in case of an emergency.

These funds should be kept separate from your other savings and retirement accounts.

By implementing each of these four steps, you can properly plan for your golden years and have the peace of mind knowing that your future is in good hands.

No two retirement plans are going to be the same. It is important to understand the options available to you and to identify what makes the most sense for your own personal retirement plan. If you need assistance, I am here to help. Book a call with me today. 

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