Financial Planning Month: Are You Ready for Retirement?

When it comes to preparing for your future, take a holistic approach to making sure you are financially ready for retirement. Today, in America, millions of households won’t have enough savings to maintain their lifestyle in retirement. To avoid this, it’s crucial that your retirement plan factors in all aspects of your lifestyle before the ‘last day at work’ arrives.

In order to make sure you are on track to meet your financial goals and live comfortably in retirement, you can start by assessing your spending, saving and investing.

How do you know when you’re ready to retire?

First, start by looking into which factors play into retirement decisions at a variety of ages. Then, you can work through calculations to determine how long your money may last. You can gauge how much you should be spending and saving annually using basic retirement calculators.

What are the key considerations to save for retirement?

• Retirement savings & estimated expenses - Use a retirement savings calculator to calculate how much will you spend annually and how much you will need to save.

• Income sources - What are your income sources? For instance, will you receive social security, a pension or an income stream from real estate properties?

• Where to save - Once you‘ve established estimated expenses and income, understand where you should draw from first. This will influence where you begin keeping your retirement savings. Consider options that aren’t taxable as your first ‘bucket to fill’.

What are your options for saving?

• Take advantage of your employer-sponsored plan, especially if your employer offers matching contributions.

• Consider putting additional savings into a self-directed IRA, so that your money can grow tax-deferred. In a self-directed IRA, you can hold a variety of investments, including mutual funds, ETFs, stocks and bonds, as well as alternative investments, which can add an additional layer of diversification.

Keep in mind, it’s important to do a retirement “check-up” regularly to continue on the right path to saving. When performing a retirement “check-up”, take a comprehensive look at all of your assets across all accounts to make sure you are well diversified, and make sure you have accounted for any retirement funds you may have left in a former employer’s plan.

You can also talk to a financial advisor or accountant about planning for retirement and create a long-term strategy that’s right for you.

Visit our Learning Center to access a wealth of resources, including calculators, articles, videos and more that can help you prepare for retirement.

The material in this blog is presented for informational purposes only. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.