A Retirement Planning ChecklistSubmitted by Reby Advisors | Certified Financial Planners | Danbury, CT on July 24th, 2015
Retirement planning may seem complicated, and in many ways it is. But demystifying retirement planning can make getting started a lot easier, and getting started is often the most important part.
The earlier you start planning, the more choices you have, the more protection your insurance will offer, the more your savings will grow, and the more opportunity you’ll have for cash value accumulation. If you start saving for retirement at age 20, you can set aside a much smaller percentage of your income than if you start at 30 or later. In fact, if you wait until age 30, you may need to save twice as much each year to achieve the same retirement age and lifestyle.
No matter what age you are, the time to take action is now!
The same principle of the earlier the better applies at any age, whether it’s increasing contributions at 45 instead of 55, or exploring insurance options at 50 instead of 60.
If you are not yet saving and planning for retirement, this retirement planning checklist can give you the jump start you need.
· Aim to contribute at least enough to get the full company match. Many firms match employee contributions up to a predetermined level -- often about 6 percent. If you do not contribute at least that much, you are literally leaving free money on the table.
· If you don’t have an emergency fund, set up an automatic transfer program to pull money from your paycheck and place it in savings. This makes saving a priority and forces you to live on less than you make.
· Review other sources of retirement income. If you will be eligible for a pension, check with your employer to determine the amount. Do the same with Social Security; you can check your estimated benefits at the Social Security website. Contact an advisor to determine when may be the best time to claim, and how to take advantage of your spousal benefit.
· Talk to an advisor about when and how to claim Medicare. Healthcare is one of the greatest costs for many retirees. How you pay for it can make or break your retirement plans. And consider how you'll cover expenses not covered by Medicare, such as the debilitating costs of long-term care, which can wipe out your finances in a hurry and potentially cause you to become dependent on loved ones or go broke.
· Determine how much extra you will need to cover your expenses and desired lifestyle in retirement. Once you know how much you can expect from other sources, it will be easier to calculate how much your portfolio needs to generate.
· Review your beneficiary designations especially whenever you experience a major life change. If you are getting married, you will want your spouse to be the beneficiary on your retirement accounts. If you are getting divorced, you may want to revisit that choice and change the designation.
· Keep a close eye on your investment expenses. High-cost mutual funds can really eat into your investment returns. Seeking out lower cost options can put more money in your pocket.
· Read your statements carefully, but do not obsess over them. Retirement planning is a marathon -- not a sprint. If retirement is decades away, the month to month ups and downs of the market do not mean very much.
Planning for retirement is not easy, but the sooner you get started the better off you should be. By planning for your financial goals now, you can develop a mix of insurance and financial solutions that have flexibility, and choices that put you in control of your financial future.
For guidance on how to get started and develop a plan that’s right for you, your family, and your future retirement, contact Reby Advisors today for a complimentary initial consultation.