Financial Resolutions: The golden years
Congratulations – reaching retirement is no small feat. Hopefully your careful planning and saving is paying off. While your retirement years should be a time to relax and experience new things, remember to keep your eyes and your attention on your finances. Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, suggests the following areas of focus for retirees.
1. Review your goals. Even the best plans will fall short if you don’t review them on a regular basis. If you have a written retirement plan, set aside time on at least an annual basis to make sure you’re on track financially – and accomplishing at least some of the things you set out to do during your retirement years. If you haven’t documented your goals previously, consider doing it now. It’s never too late to establish a road map for the years to come.
2. Make your money last. If you’ve planned and saved appropriately, you likely feel confident in your ability to live comfortably in retirement. But are you managing your nest-egg as efficiently and diligently as possible? Make sure to establish a budget and adhere to it as much as possible to avoid coming up short in the future. If you’re pulling funds from multiple sources, consider the tax and interest implications of your withdraw strategy. Some simple changes to where you draw cash from may help your money last longer.
3. Make adjustments. With many people experiencing retirements that last 20 or 30 years, it’s understandable that your goals and desires might change over time. Embrace this – but also make sure to adjust your retirement plans to reflect these new plans. If you find that you need additional income to supplement Social Security and your savings – or to simply fund the things you’d like to do – consider working part-time. If travel or relocation are on your mind, make sure you’ve determined and accounted for all the costs that may accompany these activities. Be prepared for changing healthcare and housing needs by determining what their impact to your overall plan might be and amend accordingly.
4. Establish your legacy. Determining the legacy you want to leave is a very important and potentially rewarding part of your overall financial and retirement planning process. If you don’t already have an estate plan, set aside time to go through this process now. If you’re married or in a committed relationship, work with your significant other to make these decisions together to ensure your plan reflects what both of you want. Discuss things like how you’d like your assets to be divided amongst your heirs and if there are any organizations you’d like to support. Estate planning can be complex, so consider consulting with a financial advisor, estate attorney and tax professional during this process.
5. Be open with your family. If you have children and grandchildren, you may begin to see your family grow exponentially. This can be one of the best aspects of growing older, but it can also cause financial and emotional stress if you don’t set clear boundaries. If someone in your family requires financial assistance and you’re able to help, clearly communicate your limits and expectations before doing so. This is also a good opportunity to share your estate plans with your loved ones in order to avoid any misunderstandings or disappoints later on.
One of the most rewarding parts of retirement is relaxing and spending time with family and friends, but that can be difficult if you’re stressed over financial matters. If you’re feeling less confident about your retirement then you’d like, don’t feel like you have to go at it alone. A financial advisor can help you take an objective look at your financial situation and establish a plan for the years to come.
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