Retirement Planning – 6 Steps to Follow Before You Retire

October 19, 2017

When You Only Have 5 Years or Less to Retire

You have worked hard for many years and now it is time to start thinking about what your retirement will look like. You may have some thoughts, dreams, and even some worries about retirement. This is the perfect time to start getting organized and making sure that your retirement goes as you have envision it.

To make it simple we have created a 6 step process we can help you follow before you retire.

Step 1 – Get a Clear View of Your Financial Picture

This process involves a thorough review of all your financial accounts, insurance policies, and other major assets, as well as a review of your liabilities. The goal is to determine your potential sources of income during retirement. In some cases it may make sense to consolidate some of your accounts and to start thinking about rolling over old 401(K) accounts into IRAs. In other cases, addressing some of your liabilities before you retire may be a good option.

Step 2 – Determine Your Goals and Lifestyle During Retirement

We call this the all about you step. This is all about what you want to do during your retirement years. Is your goal to travel, work part time, or volunteer? Is your goal to start a new career?

Once we know what your goals are, we can review your expenses and income needs, and work on your budget.

Step 3 – Review and Adjust Your Budget

This is a critical, as many pre-retirees tend to underestimate the cost of retirement. We can work with you to build a budget that helps you meet your goals. After you have a clear picture of your budget, you will be able to determine how much you will need to replace as income to be able to fund your retirement years.

Step 4 – Analyze Income Replacement Strategies

Now that you know how much you will need for retirement, it is time to figure out the source(s) of the income. This is the step where we help you determine how you will fund your retirement. In most cases, people use income or distributions from their investment portfolio, but there are also other ways including:

  • Social Security – we help you determine what is the best claiming strategy to maximize the amount you receive.
  • Downsizing – If you have an empty nest, downsizing your home may be beneficial. You can use some of the proceeds from the sale of your home to fund your goals during retirement.
  • Adjusting your budget – we can help you review your budget to determine the best way to streamline expenses.
  • Working Part Time – you may decide that retiring full time is not for you, and that working part time doing something different will not only help you stay busy but will also help you fund retirement.
  • Relocating to a Less Expensive State – During retirement years some people want to relocate to less expensive states or to be closer to family. We can help you review this option.

Step 5 – Determine and Adjust Portfolio Risk

Now that we have a clear picture of your goals, your budget, and sources of income, we can review and build an investment portfolio that is appropriate for your needs. Here’s what we consider when we do this:

  • How long does your portfolio need to last?
  • How much money will you need from your portfolio each year?
  • How much risk should you be taking based on your age, needs, and risk tolerance?
  • What investment options should be included in your portfolio?

Step 6 – Monitor and Make Adjustments

Life is not static. We plan for today but we can never account for changes or challenges that we may encounter along the way. This is why monitoring and making appropriate adjustments to your financial plan and investments is so important. We can help you determine the impact of financial decisions on your goals and retirement.

Retire With Confidence

Find out how we can help you with a free initial consultation. Simply fill out our request for information form and one of our advisors will contact you to find out how we may be able to assist you.

Contact Us at 305-648-9814