One of the most common questions our clients ask our retirement plan advisors is, "How can I live comfortably during retirement?" We certainly understand why so many people ask this question a 2015 study shows that only 58% of Americans feel they're financially prepared for retirement.
Make Retirement Planning Part of Your Comprehensive Financial Plan
Planning for retirement should be an integral piece of your strategic financial planning process. Start by asking yourself a few questions, namely:
- What's my tolerance for risk?
- What's my time frame for retirement?
- How much money will I need per month in retirement?
- How much money do I need to accumulate by the time I retire?
The answers to these questions will guide your investing and wealth management strategies.
Your Wealth Management Process: Keep Retirement Saving at the Forefront
Feel like you're not setting enough aside for the future? Take a hard look at your financial plan and find places where you can cut costs and put the savings into your retirement accounts. A few simple changes can make a big difference without disrupting your current lifestyle, such as:
- Eating at home a few more nights per week
- Getting rid of that expensive cable service
- Research home and car insurance to find lower premiums
- Reduce your cell phone minutes or change to a pre-paid plan
- Depending on the equity in your home, talk with your mortgage company about the possibility of cancelling your private mortgage insurance (PMI)
- Set up an automatic deposit straight to your savings account or retirement plan on each payday
- Fund a Health Savings Account (HSA); contributions aren't taxed and they rollover if you don't use them right away
- Take full advantage of your employer's retirement plan and available matching contribution by contributing the maximum allowed each year
Unnecessary Debt can Derail Your Comprehensive Financial Plan
As nice as it would be to get that brand-new SUV or sailboat, taking on debt can set your retirement savings back by years -- or worse, decades. Make your current car last a few more years and rent a boat on your next vacation; just remind yourself of the importance of your long-term goals. Avoid paying for items on credit, too, as the interest will eat up your savings in the long run. Instead, pay your debts off in full each month and avoid the interest expense altogether.
And another debt-busting trick? Making more than the minimum monthly payment on your car loans, student loans and credit cards. Paying just a bit more each month will reduce the amount of interest payments you'll make over the life of the loan, as well as paying it off faster so you can focus on saving for retirement.
Work With a Retirement Investment Advisor
Remember, you don't have to go it alone. Regular meetings with a trusted wealth advisor will help keep your retirement planning on track and ensure you're doing all you can now to have a comfortable retirement in the future.