Planning for Retirement: Our Wealth Advisors Share 6 Easy Steps

By Bruce Smith | October 30, 2015

If you’re worried about how to best plan for retirement, you’re not alone; a 2013 survey indicates that only 13% of Americans feel “very confident” about having enough money for a comfortable retirement.

Bruce Smith is a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyClients often share their retirement concerns with their retirement planning advisor and -- given the uncertain future of Social Security and Medicare, the decreasing security offered by corporate and government pensions, and the financial crisis’ $11 trillion impact on our collective net worth – it’s easy to understand why retirement planning is a significant concern for so many.

These six easy steps will help you get serious about your retirement planning.

Step 1: Procrastination Shouldn't be One of Your Financial Strategies

Procrastination may be a common human trait, but it’s definitely not conducive to successful retirement planning. Survey statistics also indicate that:

  • Only 46% of people have analyzed their financial circumstances to determine the amount of retirement savings they need

  • 55% of Americans report that their debt level hinders saving for retirement

  • More than half report less than $25,000 in savings and investments

  • Just 20% feel they are doing a good job of preparing for retirement

Most of these issues stem from procrastination and a widespread reluctance to address retirement planning. We feel that a lack of financial education and a general distrust of investment professionals has led many to shy away from seriously addressing their retirement needs.

Step 2: Your Retirement Plan Should Contain a Commitment to Action

There’s a big difference between having an interest in doing something and committing to taking action; therein lies the difference between letting the future happen to you or pro-actively shaping it. An unknown author summed it up neatly: “There’s a difference between interest and commitment. When you’re interested in doing something, you do it only when circumstance permits. When you’re committed to something, you accept no excuses, only results.”

Are you interested in securing a comfortable retirement -- or are you committed to it? If you’re lacking a true commitment, it’s time to talk to your spouse, partner or trusted wealth advisors and develop a proactive plan to spark that commitment and get moving in the right direction.

Step 3: Strategic Wealth Management Based on Vision and Goals

Just as you would never attempt to manage a company without defining a clear vision and setting concrete goals, visioning – or painting a picture of the ideal “rest of your life” – is an essential component of the retirement planning process. After you’ve defined what your ideal retirement will look like and how much it will cost, you can create a specific, goal-centered action plan to get you where you need to be.

Clear, concrete goals – such as, “I want to generate a 30-year, inflation-adjusted, pre-tax income stream of $20,000 from my retirement account” -- allow you to calculate a target and identify the savings and rate of return you’ll need to meet that target. Once you’ve defined your goals, a financial planner can offer educated recommendations as to how to best position your assets and align your portfolio with your goals.

Step 4: Research the Wealth Planning Options

Whether you’re a new investor seeking tax-advantaged, moderate ways to save, a business owner playing an aggressive game of catch-up, or somewhere in the middle, it’s essential to identify the most appropriate retirement savings vehicles for your situation.

Work collaboratively with your reitrement investment advisor, CPA and – sometimes – a retirement plan third party administrator to sort through the options and determine which retirement savings plan will help you meet your goals most effectively.

Step 5: Align Your Portfolio With Investment Management Solutions

Once you’ve identified an appropriate retirement savings vehicle, implement an investment approach designed to maximize your long-term success. While the financial media and most financial advisors may focus on which funds, stocks or sectors to own or avoid, well-documented scientific studies – and our two decades of experience -- indicate that that globally diversified portfolios of low-cost index or structured asset class funds offer the highest probability of long-term investment success.

Step 6: See it Though

Bruce Smith is a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyWhen it comes to achieving your financial goals, discipline and follow-through are essential – but that may be easier said than done. When markets fluctuate and life throws financial curveballs your way, it’s all too easy to stop contributing, or worse yet, withdraw money prematurely or take loans against your retirement savings.

Avoid these pitfalls by:

  • Educating yourself about the markets; educated investors tend to be more tolerant of market fluctuations, leading to more successful investments

  • Build a cash reserve so you can meet unforeseen needs without tapping into your retirement savings

  • Automate the investment process by linking your checking or payroll directly to your retirement account

These easy steps can help you act in your own best interest and get committmed to your financial future. And as always, seeking the guidance from a caring and competent retirement investment advisor can make all the difference between average returns and a successful retirement.



Posted in Retirement Planning