Five Steps to Feel More Confident about Your Retirement
Adapted from David Katz’ book, “A Financial Prescription for Doctors and Dentists:
Strategies for Achieving Your Personal and Career Goals”
It is natural to have mixed emotions about retirement – it is a huge life change that people spend most of their working life preparing for. While the thought of retirement is exciting, the options and advice available can sometimes seem overwhelming and complex. There are several simple things you can do if you are feeling unprepared for your retirement years. Check out the following steps to help you get ready for this milestone.
- Determine your vision. One of the most enjoyable parts about planning for retirement is deciding how you will spend your Though you could just be looking forward to relaxing, you may also decide to move to a different area of the country, travel, volunteer or spend more time with family and friends. Your plans can always change, but creating a list of activities you may want to pursue is a valuable and fun part of the planning process.
- Start with the Developing a written plan is the first key step, but before you get caught up in the numbers, determine what you will absolutely need to cover expenses that are absolutely essential. Include basics like groceries, mortgage payments, healthcare costs and other financial obligations. You may want to make a list of areas where you could cut back and reduce your expenses if you hit a financial roadblock in the future.
- Make your plans Many people get hung up on this step, as it can come with a tough reality check. To begin, calculate how much money you will need to cover your essentials over the course of a 30-year retirement, and then add discretionary expenses that accompany activities and lifestyle goals – such as travel and hobbies. Be honest with yourself and try to account for cost-of-living increases and rising healthcare costs in your projections. This will give you a rough estimate of how much “income” you will need in retirement to replace your paycheck and achieve your desired lifestyle. Then consider all the sources you can draw this income from – such as a 401(k), annuities or cash savings. Also consider breaking this amount down into smaller goals that you can more easily prioritize, manage, and track.
- Protect your plan and your Ensure the beneficiary information on your accounts is up-to-date and that you have the right insurance and protection plans in place to safeguard your income and assets now – and for the long-term. Also begin thinking about the legacy you want to leave – to your family or to organizations that are important to you. Involve your loved ones in these conversations and clearly communicate your intentions and expectations.
- Track your As with all goals, it is important to set milestones, check-in and reflect as you go. Keep in mind that a little time and organization goes a long way. Set aside one day each month to sit down with your finances and consider meeting with a legal and financial professional annually. Even if your goals still seem far away or if you have experienced a setback, you will not regret spending the extra time to review your progress. This also provides a good opportunity to make adjustments if your situation or plans for the future have changed.
Retirement planning can be a complicated, emotional, and overwhelming process. Consider seeking objective advice from a professional financial advisor who can guide you through it and ensure you are aware of all your options. It is important to keep in mind that the surest way to feel confident about what is to come is to do everything you can to prepare for it.
David is an Accredited Investment Fiduciary® (AIF) and an Accredited Asset Management Specialist (AAMS®) who advises professionals, retirees, families, and other clients on personal financial strategies. His focus is on financial planning and asset management. David has more than 28 years of investment and wealth management experience, and is the author of two books “A Financial Prescription for Doctors and Dentists: Strategies for Achieving Your Personal and Career Goals” (2015) and “Beyond Performance: How Financial Advisors Deliver Added Value to Their Clients” (2018)
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
