Is this a good time to start planning for retirement? Where should you begin?
Although most of us recognize the importance of sound retirement planning, few of us embrace the nitty-gritty work involved. With thousands of investment possibilities, complex rules governing retirement plans, and so on, most people don’t even know where to begin. Here are four suggestions to help you get started.
1. Set your retirement goals. First, set lifestyle goals for your retirement. At what age do you see yourself retiring, and what would you like to do during retirement? If you hope to retire at age 50 and travel extensively, you’ll require more planning than other people. You’ll also need to account for basic living expenses, from food to utilities to transportation. Most of these expenses don’t disappear when you retire. And don’t forget that you may still be paying off your mortgage or funding a child’s education well into retirement. Finally, be realistic about how many years of retirement you’ll have to fund. With people living longer, your retirement could span 30 years or more. The longer your retirement, the more money you’ll need.
2. Estimate monthly retirement income and expenses. You will want to project your annual retirement income and see if that income will be enough to meet your expenses. Identify the sources of income you’ll have during retirement, and the yearly amount you can expect to receive from each source. Common sources of retirement income include Social Security benefits, pension payments, distributions from retirement plans (e.g., IRAs and 401(k)s), and dividends and interest from investments. If you find that your retirement income will probably meet or exceed your retirement expenses, you’re in good shape.
3. Bridge the gap. If your retirement income is not sufficient to cover expenses, you need to take steps to bridge the gap. Consider delaying retirement, saving more money, or taking more investment risk. You can also start creating multiple streams of income that will continue into retirement. There are 21 streams of income you can create now and in retirement.
4. Get good help. The above three steps are just a starting point. The further you are from retirement, the harder it is to project your future income and expenses. If you are ready for more detailed planning, consult a financial professional. You should consult a trusted advisor if, for no other reason, to help you get your finances organized.
So make sure you have your financial affairs in order and a good way to start this process would be to contact me by e-mail at firstname.lastname@example.org or call me toll free at (888) 914-9909. I would be more than happy to review your financial situation with you to make sure your financial house is in order, and thank you for joining me this week for your retirement minute.
Until next week!
Have a retirement planning question for John Bearss? Send it to him here.
About the Author
John Bearss (Retirement Specialist)
John R. Bearss is a retirement specialist. He has been successfully helping clients nearing retirement generate lifetime income streams for 25 years. He can be reached by phone at (888) 914-9909.
Disclaimer: Investing involves risk. Always do your own due diligence and consult a trusted financial professional before making any investing or financial decisions. John Bearss is a retirement specialist. He is also a registered representative of and offers securities through SICOR Securities, Inc., Member FINRA, MSRB, SIPC, 6500 Poe Avenue, Suite 105, Dayton, OH 45414 | (937) 890.3101. Neither SICOR Securities, Inc., Lifetime Decisions Management nor their representatives provide legal or tax advice. Please consult your CPA or qualified tax advisor before making any decisions. Lifetime Decisions Management, Inc. and SICOR Securities, Inc. are not affiliated.