Retirement Financial Planning


No matter how close you are to that glorious last day of work, the idea of retirement financial planning always seems a bit daunting. Regardless of how much you want to cover all the bases, there is always an element of uncertainty that must be overcome. You’ve spent years working for a steady paycheck with the possibility of a raise after your annual review and now you are staring at the likelihood of a fixed (and greatly-reduced) monthly income. How can you set up a portfolio that is relatively insulated from the volatility of today’s markets? When you are projecting into the future, are there questions you can ask to guide your decisions? While no one can be certain of what lies ahead, there are three things that could be the key to living well instead of scraping by:

What investments have you made to this point?

As you begin the process of identifying your portfolio’s strengths and weaknesses, the first place to go is the accounts you already have in place. In addition to a 401(k) or Roth IRA, you might have some mutual funds and real estate that make up your financial picture. Understanding how each of these will pay out as you leave the workforce is a major step to making meaningful adjustments – if you don’t know what you’ve got, how can you figure out what to change? It may be a dramatic wake-up call or it could end up being a pleasant surprise but, either way, you will be better off.

What do you want to do?

Across all sorts of industries, the importance of a vision is well-known. Acting as a central point around which choices are made – not to mention a motivational tool – a clear idea of what you wish to achieve is crucial. Are you and your spouse planning to travel the world? Would you like to set up a fund for your grandchildren’s college educations? Want to split time between a warm-weather city during winters and small mountain town in the summer months? All of these are wonderful dreams, but until you articulate exactly what you hope to see in your life, you are merely a rudderless ship moving at the whim of the current. From here, you will have the advantage of moving – and spending – with purpose toward your goals.

What would it take for you to make your retirement dreams come true?

Now that you comprehend the differences between where you are and where you want to go, it’s time to lay out a road map to cover the distance from here to there. Sit down with a trusted professional and begin the process of tough decisions – just be sure to know what is up for grabs (say, your cable TV subscription) and what will stay (your home, for example). If your income is unable to match up with what you have in mind, be open to the possibilities for generating other streams of wealth. Have you trimmed your expenses back enough? Are there other investments to make? Could you start a business? Examine every option and come to a conclusion you will stick to for the long haul. When your time is up, you will be much happier knowing your golden years were a time of fulfillment instead of desperation.