To build the life in retirement that you envision, there are retirement planning steps that are important to begin early on. Retirement planning is a key part of any sound financial plan. Procrastinating because you feel there’s plenty of time, or because you’re not sure where to start, can leave you with a retirement that’s not as comfortable as you had hoped for. In this article, we discuss how to craft your ideal golden years using retirement planning steps that can help you on your path to building a more secure future.
The Basics of Retirement Planning
In the most straightforward terms, retirement planning is about determining how much money you’ll need to live the lifestyle you want to after you stop working. While perhaps the important important of retirement planning steps is to identify your overall savings goal, the next is to consider the strategies to achieve your goals. All of this entails considerations that include your lifestyle, health, and anticipated expenses.
Identifying your sources of income during retirement is also important in your retirement planning steps. Social Security, investments, pensions, personal savings, and other assets may all be included in your retirement portfolio. Understanding how each source of potential income will contribute to your retirement and making any alterations that will ensure you will have enough money for the retirement you envision is important.
Developing a plan for managing your retirement income is the last step. Creating a budget, making investments, and considering forms of guaranteed income are all a part of this aspect of retirement planning. Remember that life circumstances change, and your plan will most likely need to be adapted to accommodate those changes as you move closer to retirement.
Important Aspects of a Retirement Plan
While every retirement plan will be different depending on an individual’s circumstances, there are important retirement planning basics we believe should be included in any plan. These include:
- Determine Your Retirement Age – Determining a target retirement age is beneficial to crafting your plan. Knowing when you want to retire can help you identify your savings and investment strategies to meet the financial goals you’ve set. When you take Social Security into consideration, it’s important to be aware of the fact that retiring early and drawing on those benefits reduces your amount of Social Security income. Conversely, waiting to claim your benefits until your full retirement age can increase your benefits and reduce the amount of time that you will need to draw on your savings and investments.
- Determine Your Retirement Income Needs – A critical step to a financially secure future is to determine your retirement income needs. How much will you spend month-to-month and year-to-year? As you navigate this, take into consideration inflation, taxes, and healthcare costs. Including these factors will help to give you a clearer picture that can guide your savings and investment strategies to meet your unique retirement income goals.
- Start Saving Early – While it’s never too late to start saving, it’s a smart strategy to start as early as you can. Even if you are just starting your career, and your income isn’t high, putting aside just a little and making it a habit will serve to grow your retirement nest egg. Developing a savings plan that takes into account your retirement income goals will help you on your way to a more stable retirement future. It’s best that your plan not only includes regularly setting aside a portion of your income but also contributing the maximum to a tax-advantaged retirement account, especially if your employer offers a matching 401(k).
- Invest Strategically – As your income and savings grow, making an investment plan for your money is a helpful part of creating a financially secure retirement. With many investment options available, it can be helpful to utilize the services of a financial advisor. A well-diversified portfolio can include a mix of stocks, bonds, and other assets. A financial advisor can help you determine your risk tolerance to help balance risk and reward and guide you in crafting a diversified investment portfolio that matches your needs and goals.
- Understanding Social Security – Understanding how Social Security can contribute to your retirement is another important aspect of your retirement plan. For many, it’s an important source of retirement income, and factors such as your age, income history, and the age at which you choose to draw your benefits can all have an impact on the amount of benefits you receive. Know that you have options, and do your due diligence to choose the best claiming strategy for you.
Would the Guidance of a Professional Advisor Help You to Craft Your Ideal Retirement?
Retirement planning is an important part of the financial planning process to help you achieve the future you desire. While we have outlined some practical retirement planning steps above, a professional financial advisor can also help you navigate many other aspects of retirement planning and help you choose the best strategies for your needs.
If you think you would like to work with us to help establish your dream retirement, give us a call at (540) 720-5656.
Sources:
- [1] https://www.investopedia.com/terms/n/normal-retirement-age-nra.asp#:~:text=Key%20Takeaways,born%20in%201960%20or%20later.
- [2] https://www.investopedia.com/articles/personal-finance/112315/how-401k-matching-works.asp
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Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. Megan is also a fully licensed Life, Health, and Annuity agent. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Chase Lopez joined the ILG Financial team in 2020 as an advisor and obtained his