Retire with Confidence

You’ve worked and saved for 35+ years and now it’s time to retire. Your heart says yes but in the back of your head there is doubt.

“Will I outlive my money?” or “Do I have enough money?”

Retiring is a huge decision. Don’t just wing it or have the “I’ll deal with it when the time comes attitude.” Retiring with confidence means to eliminate as many of the ‘unknowns’ as possible. The goal is to retire without worry. Worrying about money when you are working is not fun but it’s really not fun when you retire. Have a plan. With a well thought out and constructed plan, you’ll have those answers in front of you. That plan does not have to be complicated or confusing.

Know Your Numbers

“Nobody cares more about your money than you do.”

If you don’t have an intimate relationship with your money, then it’s time to get one. It amazes me how many people put their retirement plan on autopilot and figure if they keep “socking away” that everything will just take care of itself. That approach might work if you’ve “socked away” a substantial amount of money, however you won’t truly know until you do some planning. On the other hand, maybe you’ve oversaved for the retirement lifestyle you want, and you can retire sooner.

There is an old saying that people spend more time planning their annual vacation than they do planning their retirement. In my experience, that is a true statement. But it’s not too late to reacquaint yourself with your money. Grab your quarterly statements, dust off and update those old spreadsheets, and get back to crunching your numbers. Knowing where your numbers are today is going to help you plan for your future retirement.

Using a financial advisor can be great if you’re too busy to invest your money on your own, but don’t just write a check and walk away. You want to be engaged in the process. View your relationship with your financial advisor as a partnership. Don’t disconnect and tell them, “You handle it.” This is a mistake I see many folks make. You work the majority of your life, saving and investing money with the end goal being retirement, but then you put all of your hard-earned money in the hands of a someone you don’t personally know and only check on your money occasionally? WRONG. Stay involved with your money. Know how much risk you are taking, know if your funds are outperforming their index, know the fees you are paying, set goals, and be sure you are hitting them. Get involved and stay involved with your advisor and your money.

Lifestyle Planning

What will you be doing in retirement? Are you going to travel the world? Buy an RV and roam around? Relocate to a different part of the country to be closer to your grandchildren? Or stay where you are and invest in a hobby?

If you have plans for drastic changes in retirement, then you are going to want to know what that lifestyle is going to cost you. Start doing your research now so you can plan accordingly. Again, retiring with confidence is about trying to eliminate as many of the unknowns as possible.

For most people their lifestyle isn’t going to deviate too far from when they were working. There might be a part-time job or a new hobby but with little change to their monthly budget. This makes their retirement planning a bit easier.

If you have big plans in retirement, make sure your new lifestyle fits your budget.

Addressing the ‘What Ifs’ in Retirement

We’ll never be able to predict if an event may or may not happen in the future, but we can prepare for some of the possibilities. It is important to determine what ‘what ifs’ will impact you the greatest and include them into your plan. Plan on an emergency fund to handle the smaller ‘what ifs’. These are just some of the forward-looking questions folks approaching retirement ask themselves:

You Have a Retirement Plan, Right?

A hope and a prayer is not a retirement plan. A true retirement plan is one based on your real numbers, such as your debt, how much income you’ll need and can generate, your current assets, and the cost of your lifestyle.

Your retirement plan doesn’t have to be a 125-page, $3,000-binder that you paid a financial advisor to put together for you. What it needs to be is a carefully thought-out process that includes all your needs and how they are going to be met over the course of the coming decades.