Are You Ready for Retirement?
Now more than ever before there are many seniors in the workforce due to lack of retirement income. Retirement planning is key to building a successful retirement planning strategy and money management plan; while some seniors in the workforce today just never made a plan, others are working in order to meet the goals they set for themselves when they made their retirement plan.
Evaluating whether you’re ready for retirement or not can be tricky. You not only need to ask yourself important questions about your desire to retire- some seniors stay in the workforce simply because they’re not ready to leave yet!- but you’ll have to be honest about your financial situation and preparedness. Being realistic about your finances is integral to successfully preparing for and eventually enjoying your retirement.
Below are a few tips to get started on the road to retirement- if this is all old news, you’re even closer to retiring successfully!
How to Create a Financial Plan
A financial plan is a written statement of your financial goals and a step-by-step outline of how to attain them. A retirement financial plan will help you better understand the path to your golden years, especially in terms of your retirement income. Many experts agree, making a financial plan is a vital step to reaching your goals. Some key things to include in a financial plan include: all of your current income and savings information, a dossier of your financial documents and future plans for savings and investment income. With all of this written out, you can identify realistic goals and a workable strategy to meet them.
Paycheck Planning
We’ve found that even the most prepared retirees run into problems when it comes to budgeting and managing retirement savings. One successful method of managing your retirement account is to create a retirement paycheck. Looking at the amount you have saved, and the amount you can expect to earn from interest and other sources, plan a bi-weekly or monthly “paycheck†schedule on which you can base your budget. Having a pay check-based retirement plan can help you make sure that your retirement funds last throughout your retirement. Remember to plan for the unexpected, too, keeping some savings for medical costs and housing maintenance.
Educate Yourself
Most people have their retirement savings in investments so their money can do more for them than sit collecting a few pennies in a savings account. However, many investors are wary of investing, what with the poor stock market performance of the past 10 years and rock bottom interest rates. In addition, many people don’t know much about investing- and as a result make uninformed, sometimes disastrous decisions. The most important thing you can do when it comes to making retirement investments is to educate yourself. We recommend the following books and websites to get to know your options:
- Rich Dad Poor Dad: by Robert Kiyosaki
- The Millionaire Real Estate Investor: by Gary Keller
- Rich Dad’s Advisors: Guide to Investing in Gold & Silver: Protect Your Financial Future by Michael Maloney
- IRAAssetsNews.com – “Diversified†Magazine
- BiggerPockets.com – Real Estate Investor Blog & Forum
Concern About Inflation
Because of the extraordinarily low interest rates, concern abounds regarding how inflation will affect retirement savings. If the money you put away today is worth less tomorrow, how will you ever get ahead? If you’re planning on relying heavily on pension and Social Security, inflation may be especially concerning, as neither tends to adjust to inflation. Certainly consider inflation, especially if you’re investing in an area that will yield fixed returns. Diversifying your portfolio will certainly help adjust for inflation.
Why Diversify?
Especially when it comes to retirement, you must lower the risk of loss. Diversifying your portfolio strengthens and protects it from loss; when you place your money in a number of different asset classes, you increase the chance of a security net should one area have poor performance.
How to Diversify
One way to diversify your portfolio is to start self-directed investing. Self-directed investors can select where their money is invested, so you can invest in things that you know and understand such as, real estate, mortgages and deeds of trust, tax liens, mobile homes, land, and gold & silver.
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