Have you constructed a detailed plan for retirement? Or do you assume that because you’re regularly stashing money in a retirement fund, that everything will fall into place later? Whether you’ve thought about retirement quite frequently, or aren’t sure where you’re headed, it’s important to pause and re-evaluate your plans on a regular basis. Ask yourself these questions, and consider revamping your retirement plan if the answers are difficult or surprising.
How much are you saving each pay period? If you can’t answer this question without doing detective work, you might not be focusing on retirement planning hard enough.
What is your retirement savings goal? If you haven’t set a goalpost for retirement savings, this is a sign that you haven’t established a solid plan yet.
Are you living on less than 100 percent of your income? If you spend everything you make, there is nothing left over for retirement savings or paying down debts. A general rule is that you should live on 85 percent of your income, and save the rest (but that figure could vary a bit, depending upon your situation).
Are you in debt? How much? A mortgage is not such a big deal, especially if you’ve planned to pay it off before retiring. But if you’re carrying a large amount of revolving debt, such as credit cards, that’s a sign that you’re living beyond your means. It’s not sustainable in the long-term, and does not allow you to adequately prepare for your future.
Have you ever borrowed from your 401(k)? Some debts are worse than others, and borrowing from yourself is the worst loan you could take. If you’ve repaid the money by now, you’re in slightly better shape, but remember that you will need to save aggressively from now on, in order to make up for lost time.
Are you counting on Social Security? Don’t make the mistake of assuming that Social Security will foot the bill for your retirement. In most cases, benefits checks are not enough to cover living expenses.
Are you taking advantage of all opportunities available to you? If your employer offers matching retirement funds, you should be contributing at least that amount each year (so that you’re not missing out on free money). That’s just one example of a valuable retirement planning opportunity, that many people tend to overlook. We can help you identify others that are available to you, so remember to meet with us regularly. We can help you answer the above questions, to help you stay on track toward a reasonable retirement plan.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.