Retirement is one of those things that people dream about and dread at the same time.
Retirement dreams vary a great deal from person to person — some people dream of travel, some of spending more time with family, and some of just good, old-fashioned rest and relaxation. Retirement dread, on the other hand, is often very similar from one person to the next. Typically, it revolves around one question: “Will I have enough money in retirement?”
Fortunately, we are here to help reduce the dread and help you spend more time dreaming. That’s because we know the secret to developing a retirement strategy: You have to take action. What that “action” is will change based on your goals. But action is important, and sometimes baby steps can turn into giant leaps, especially when you think about the power of compounding returns.
Do Something: Start Saving.
The sooner you act when it comes to making a plan for retirement, the better off you’ll be. It gives you more time to build your retirement savings, and generally, time in the market is more critical to your success than timing in the market.
When we work with clients, one of the first things we do is try to help them figure out their pre-retirement expenses and how they may change in retirement. Once we’ve done that, we can start to determine if their savings are going to be sufficient enough for their retirement.
If it fits your unique situation, it is best to start saving as soon as possible.
Do Something: Start Planning.
Many people are concerned that they don’t have a secure financial strategy for retirement. Others are worried that they won’t have enough money set aside to fill an income shortage. In addition, some don’t know where to start when preparing for retirement.
Questions on where to start, when to retire and how to go about preparing are commonly brought up by people facing retirement. There is good news though! All these concerns can be addressed with the right retirement strategy and meeting with a financial professional. And again, all of them can be alleviated by starting to prepare.
Do Something: Evaluate Your Situation.
Keep in mind, each person’s situation is different, and there is not one strategy that meets everyone’s needs. With that in mind, financial services professionals work with each person by listening to their retirement needs and wants to help them decide which strategy works best for them. While everyone’s retirement income amount will be different, the general rule of thumb is that a retiree will require 70 to 80 percent of their pre-retirement income to maintain their lifestyle.
Americans are living longer and it is important for them to have retirement savings that won’t deplete. However, this phenomenon is causing some Americans to outlive their savings, and unfortunately, many Americans are not considering just how long they may live. Knowing how much you have in savings may be easy, but figuring out how long that will last you, or how long you need it to last you, can be difficult.
Do Something: Evaluate Your Options.
There are many resources available to help you bridge any income shortage you may face in retirement. Some options that may be available to you are IRAs, 401(k)s, life insurance, and more. When exploring these options, it is always encouraged that you seek advice from a retirement professional to help make sure you are making decisions that best effect your retirement and help you achieve your retirement goals and needs.
The key point here is for you to match your income need with the correct retirement strategies, options and tools to satisfy that need. When you take health care costs, potential emergencies, plans for moving or traveling, and other retirement expenses into account, you can really give your calculator a workout.
You want to maximize retirement benefits to meet your lifetime income needs.The best approach is usually crafting a solid income plan and then having a financial services professional help to ensure your assets are properly aligned. This approach may allow you to have an opportunity to capture some growth, maintain an adequate amount of liquidity, while not overreaching.
Do Something: Start Today.
Retirement can be scary, but it doesn’t have to be. Contact Penny Lane Financial today to start building your retirement strategy on a solid foundation that may stand the test of time.