Plan Your Journey

It seems like just yesterday you were looking ahead to the next 10 years of your career and planning for that next job, the next move, the next pay increase. Now, all those “nexts” seem to pale in comparison to the big “next” that somehow crept into the horizon: retirement. This time in our life should be one that leads to peace of mind. For many, unfortunately, it leads to stress first. The questions linger in our head:

• When is the right time?

• Will my money last?

• When do I file for social security? When does my spouse?

• How will I cover my healthcare expenses?

• Will my family be taken care of?

• What will I do?

These questions are all very important and they can all be scary. But they don’t have to be. When you’re still working and have the flexibility to make adjustments is the time to consider and plan for your retirement. Pull out your notepad. Start a checklist. And begin checking it off.

Put a healthy cash reserve in place

If you’re nearing retirement you’ve already learned that large unexpected expenses are a part of life. Being prepared for them can mean the difference between tapping that retirement account years too prematurely or not. And that can cost even more than the unexpected expense in the first place. In retirement, having an emergency savings account is one way to prepare for the unexpected. If you don’t already have one in place, start building it now. Take a set amount each pay day and put it into this separate savings account. Fortunately, in 2019, there are several local and online savings account options that are paying higher interest rates than in recent history. Shop these to find the account that works best for you.

Reduce your future monthly expenses by paying off debts

For many of us, our mortgage payment is one of our largest monthly expenses. Planning to eliminate this payment prior to retirement makes our future budget that much more achievable. How many years are left on your mortgage? If it’s more years than you plan on working, figure out how much extra you’d have to pay each month to get those numbers closer together. Do the same with other debts, such as car payments. There are several simple online calculators to help you do just that.

Load up those workplace retirement plans

You’ve done well and most years you’ve seen an uptick in pay. It may have been a few years, however, since you took that uptick and put some of it towards your 401(k) or 403(b). In 2019, Uncle Sam has allowed us to save even more in these plans than in years past. You likely won’t miss a penny or two (or five) out of every dollar. Consider increasing your retirement plan contributions.

Map it out

When you travel out of state to a new destination, my guess would be you plug in the address to your GPS (or pull out that dusty road map) and figure out the best route. Sure, you could simply drive west and you may eventually get there but chances are it won’t be the most efficient route and you’ll likely lose precious time and money because of improper planning. The same is true when preparing for the journey we call retirement. It’s worth your time to sit down and figure out if the income you’re able to generate fits in with the lifestyle you’d like to live. There are small, but important, adjustments that can be made to social security filings, pension elections, retirement account withdrawal strategies, and investment allocations that can truly make a difference over your retirement lifetime. Don’t drive blind. Map it out.

If retirement is on your horizon, don’t sit idle and hope things will be okay. Eliminate the retirement worries by better preparing yourself today. That way, when it’s time for you to retire, you’ll be better able to sit back, relax, and enjoy the ride.

Disclaimer: This article is generalized in nature and should not be considered personalized financial, legal, or tax advice. All information and ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

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