Are you determined to make 2018 the year you get your retirement planning back on track? If you feel like you’re behind on your retirement savings efforts, don’t worry. You have company. A 2017 Gallup study found that more than half of Americans are worried that they won’t be able to afford retirement.1
The good news is it’s never too late to course-correct if you feel like you’re behind or off-track on your planning. A few simple changes may be all that’s necessary to get you back on track to live the retirement you’ve always imagined.
Of course, before you can take action, you need to know where you need to adjust your planning. Below are a few questions to ask yourself about your retirement and your current financial situation. The answers to these questions should provide some guidance as you develop and strengthen your retirement plan.
When will you retire?
Time may be your most valuable asset when it comes to retirement planning. The longer you have until retirement, the more time you have available to save money. Also, a longer time horizon may allow you to take a more aggressive investment approach.
Conversely, a more conservative approach may be needed if you only have a few years until retirement. If you suffer a downturn, you may not have time to participate in a recovery before you retire. A financial professional can help you analyze your time horizon and determine how it impacts your strategy.
What are your anticipated spending needs in retirement?
The primary goal of retirement planning is to create enough income to fund your expected living expenses. How can you know how much income you need to generate if you haven’t estimated your living expenses?
You may not be able to predict exactly how much you will spend each year in retirement, but you can probably make an educated guess. Think about your plans for retirement. How will you spend your time? What bills might you have? Will you stay in your current home, or will you downsize?
Also be sure to remember inflation. That’s the gradual increase in the cost of goods and services each year. Even modest inflation can have a big impact over time. Your cost of living will likely increase throughout your retirement, so that should be reflected in your estimated expenses.
What is your projected guaranteed* income?
You will likely have some level of income guaranteed through retirement. At a minimum, you will receive Social Security benefits. You can get an estimate of your benefit amount from the Social Security Administration. You may also have pension benefits or other income.
Add up your total estimated income. Is it enough to cover your estimated expenses? If not, you’ll have to bridge the gap by either adjusting your lifestyle or taking withdrawals from your retirement savings. This exercise should give you a ballpark estimate on how much you’ll need to save to fund your retirement. A financial professional can help you develop a more precise target.
Do you have an emergency plan?
Finally, plan for emergency expenses to arise during your retirement. You could face costly home or car repairs. You may need expensive medical procedures. You might even need long-term care, which can cost thousands of dollars per month.
Consider your strategy for covering these unexpected costs. You may want to keep a stable, liquid reserve fund for emergencies. You also may want to consider long-term care insurance.
Ready to jump-start your retirement plan? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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