Important Tips If You’re Approaching Retirement

So let’s just assume you’re 12 months or less from retirement and you’re trying to figure out okay, what do I do next? Retirement is just around the corner and I’m not sure that I have all of my bases covered. So that’s where let’s walk through these five tips that will help you as you prepare for retirement, which can be a stressful time. So first, let’s stress test your plan. Let’s look at what are your short-term goals. What are your long-term goals? Do you have an income plan that’s mapped out for 20-30 years to see that you have a sufficient amount of savings to help support what your lifestyle looks like? Do you have a proper amount set aside in a checking, savings account? Also with that, when you’re talking about stress testing, you want to stress test the risk associated with your portfolio. What if the market doesn’t cooperate? We’ve all seen the market as it ebbs and flows and we don’t know in the next 12 months as you approach retirement what’s the market going to do? And so do you have sufficient funds to set aside to generate the necessary amount of income for a period of time maybe when the market isn’t cooperating and you don’t want to be pulling from your portfolio when the market is down. Number two, make a budget. A lot of times people have just gotten comfortable with well, I have my paycheck and hey I’ve still got a few dollars left over at the end of the month. And that’s their plan. When it comes to retirement planning, you’re going to want to make a budget and essentially see what do your expenses look like? You can look at your credit card statement for the past six, 12 months and sort of see what are the general areas where you’re spending money? Do you anticipate any of those areas that are going to change? What about some upcoming bigger expenses? Is there travel involved? Do you have to replace the roof? Are you buying a new vehicle or a boat or something like that? And do you have sufficient funds set aside already to cover that expense? The third items is leverage opportunity. So with that I mean you’re still working. You still have hopefully this decent income that you’ve been living on. Could you use some of those additional assets? Is it worthwhile to contribute to a Roth IRA as an example to build up maybe some tax-free assets that you could draw from in retirement? Should you consider maxing out contributions into your 401K or retirement plan? Or maybe sometimes it’s valuable to build up some cash, some after-tax savings then use to either supplement income that wouldn’t be taxable or it might be for that bigger expense that you know is coming up soon. Along with that, pay off your debt. In some of the most successful retirement plans that I’ve seen have come where okay, all the major expenses are already taken care of. And so now it’s more just covering your normal day to day living and you don’t have any of those bigger debts still out there. Along with paying cash for your bigger expenses. If you’re looking to buy that fun fishing boat or the UTV or any of those toys or anything like that, ideally you’re paying cash for those and not taking on additional debt and an additional payment when it comes to your retirement plan. Number four, make sure you have a plan for health insurance and you know the projected costs. There’s different tools out there where you can do your research and figure that out or you’re welcome to give our firm a call. We have different team members that help specifically when it comes to health insurance and trying to figure out okay, what is that going to cost? Especially if you’re under the age of 65. That brings in some different planning circumstances as far as for how you’re structuring your income and for tax purposes and all that, as well as if you’re married. Okay, what does that look like for the two of you? Number five, I’d say tune out the noise. There’s day to day market swings. And a lot of time that’s when emotions take over and you potentially could make the wrong decision. You still have to be thinking long-term. If you’re not yet retired, but you’re getting close. You know, you have to figure on okay, well I’m likely living another 20, 30 plus years. So take that into consideration. So I’m hopeful that these five tips were helpful for you. If you want a little extra help on any of that, then you’re welcome to give us a call here at Centennial Wealth Advisory. We’d love the opportunity to sit down with you for a no cost, no obligation second opinion. We look forward to seeing you soon.