Many of us have watched our parents and grandparents wrap up a lifetime of work and settle down to their well-deserved reward of a relaxed retirement. But more and more, today’s generations worry they won’t be able to do the same. Approximately 40% of Baby Boomers plan to work until they die, and future generations are even less optimistic.
But you don’t have to give up the dream of living your best decades on your own terms. Careful planning can coax a retirement fund out of almost any budget. Even if you want to keep working into old age, a fund is still a wise investment in case of illness or disability.
The earlier you start planning for retirement, the better. Even tiny amounts, invested early enough, can yield big dividends. But whenever you begin, there’s a plan that can achieve your goals. A financial advisor can help you decide how to put away a nest egg that will pay for the retirement you dream about.
1. Examine the Health of Your Finances
One of the first things you should do with a financial advisor is to sit down and go over the state of your finances. Then, depending on your age and retirement savings goals, they will help you figure out a plan of attack.
The first step is improving your financial health in general. Some suggestions they might offer include:
- Paying down debts
- Starting a side business
- Taking advantage of government benefits/insurance
- Careful budgeting to leave room for savings
When you meet your advisor for the first time, bring as much financial information as you can. This includes your monthly budget, retirement accounts and balances, investments, debt and mortgage statements, pay stubs, tax returns, etc. With this information, they can suggest smarter tax decisions, recommend better investments for your savings, or help you build a sounder budget.
2. Calculate How Much You Need for Retiring
How much money you need in retirement can vary. Estimate too high, and it may feel unreachable. Estimate too low, and you won’t save as much as you need.
Some experts suggest aiming to replace 70% of your current income. But if you plan to spend your golden years traveling, you will need more, while if your house will be paid off by then, you may need less. You will also need to consider how much supplemental income you will have, such as Social Security or a pension.
Once your advisor has reviewed your finances and gets a feel for your lifestyle, they can help you figure out how much you need to save to maintain it. Alternatively, they can also help you find ways to reduce the amount you’ll need if increasing your income and savings is proving to be difficult. For example, they may suggest selling your big house and downsizing to something cozier for you and your spouse.
3. Create an Investment Plan
The money you set aside for retirement, if you just put it in the bank, wouldn’t go very far. Instead, smart planners invest their money to grow their retirement fund. Investing can be intimidating, but, done well, it’s one of the best ways to build wealth.
Most of us don’t know how to invest money wisely. A financial planner can help take the uncertainty out of it. They will recommend solid investment options that work best for your situation. For example, they may suggest more aggressive investments which are riskier, but offer higher returns when you are younger. As you near retirement age, they will scale back your portfolio to a more cautious investment strategy, since you don’t have as much time to recuperate from an unexpected hit in the markets. They can also help you with the right options to continue investing if you are already retired.
Ready to Find a Financial Advisor?
Whether you’re young or getting close to retiring, it’s always a good time to begin talking to a financial advisor. They have the knowledge and experience to guide you to a stable future so you can enjoy a golden retirement, free of money troubles.
Ready to get started? Reach out to Advice Chaser today to match you up with the perfect advisor for your needs!
