Ah, retirement. Whether you dream of living on the fairway, traveling the country in an RV, or simply enjoying a relaxed lifestyle free from the worries of the daily grind, the goal of a peaceful, comfortable retirement is what we all work and save for. When retirement looms, take the time to check off the 10 items on this pre-retirement to-do list.
1) Get your house in order. Not just your financial house – that goes without saying – but your physical home. Now is the time to make those repairs and upgrades that you’ve been putting off.
Why? Because when you’re on a fixed income, those little costs – repairing a leaky roof, painting that flaking front door, replacing that old, electricity-eating water heater – really add up fast. And, as a recent AARP survey found, almost 75 percent of seniors plan on staying in their own homes as long as possible, underlying the need to get everything in ship-shape while your income is still flowing in.
2) Aim for balanced finances. Review your long-term goals to insure that they’re balanced and diversified. The objective? Achieving what the Wall Street Journal describes as the “sweet spot” between investments that are too conservative – and don’t produce adequate growth – and investments that are too aggressive, exposing your portfolio to too much risk.
3) Create a budget. Working with your monthly, quarterly and yearly payments — from retirement disbursements and other income sources such as Social Security — create a detailed budget. Match your essential, day-to-day expenses with your income and figure out how you’ll fill in any gaps.
4) Keep emotions out of it. Pre-retirement is the time to get excited about your plan and about organizing your life. Avoid getting emotional about your money; it only causes stress and anxiety and clouds your decision-making process.
5) Understand your 401(k). Arrange a sit-down with your HR Department or plan administrator. Come armed with questions that’ll help you understand the options for your 401(k), pension or other retirement plan.
6) Call Social Security. Give the Social Security office a ring and ask for an explanation of your benefits and payment details. Learn when you can start receiving payments, how much you’re entitled to, and the best time to start claiming Social Security benefits.
7) Re-evaluate your risk level. The amount of risk in your portfolio depends on a range of factors; along with your current amount of savings and how much time you have left to save, one of the most important factors is the stage you’re at in your investing career. Review your investment strategies to determine whether your risk burden is appropriate and effective.
8) Consider the tax effect. Sit down with your CPA and review the tax consequences of various retirement plan options. Seek tax-smart strategies to best manage your assets while minimizing your tax burden.
9). Make yourself happy. You’re about to embark on a new stage in your life – and that’s cause for excitement! Celebrate by exploring your interests, learning a new trade, preparing yourself for your next career – and joyfully planning for your future.
10) Find the RIGHT advisor. Proper financial planning is the springboard to financial success. Choose your financial advisor wisely – after all, you’re placing your financial security in their hands.
Click below to hear Stu review this topic on WNBP.com FM Radio 106.1 in Newburyport. Live every Tuesday morning with Win Damon.
Stu Steinberg of Eaglerock Financial, Inc. has worked with families and businesses for more than 25 years, helping them work toward their financial goals through a holistic, well-rounded approach rooted in objectivity, education, and empowerment. Stu is highly regarded by clients and colleagues for his unique combination of investment, CPA and entrepreneurial experience in the high net worth market.
7 February 2014