By Beth A. Nelson
It’s natural to have mixed emotions about retirement – it’s a huge life change that
people spend most of their working life preparing for. While the thought of retirement
is exciting, the options and advice available can sometimes seem overwhelming and complex.
There are several simple things you can do if you’re feeling unprepared for your retirement
years. Check out the following steps to help you get ready for this milestone.
1. Determine your vision. One of the most enjoyable parts about planning for retirement is
deciding how you’ll spend your time. Though you could just be looking forward to relaxing,
you may also decide to move to a different area of the country, travel, volunteer or spend
more time with family and friends. Your plans can always change, but creating a list of
activities you may want to pursue is a valuable and fun part of the planning process.
2. Start with the basics. Developing a written plan is the first important step, but before
you get caught up in the numbers, determine what you will absolutely need to cover expenses
that are truly essential. Include basics like groceries, mortgage payments, healthcare costs
and other financial obligations. You may want to make a list of areas where you could cut
back and reduce your expenses if you hit a financial roadblock in the future.
3. Make your plans concrete. Many people get hung up on this step, as it can come with a tough
reality check. To begin, calculate how much money you’ll need to cover your essentials over
the course of a 30 year retirement, and then add discretionary expenses that accompany
activities and lifestyle goals – such as travel and hobbies. Be honest with yourself and
try to account for cost-of-living increases and rising healthcare costs in your projections.
This will give you a rough estimate of how much “income” you’ll need in retirement to replace
your paycheck and achieve your desired lifestyle. Then consider all the sources you can draw
this income from – such as a 401(k), annuities or cash savings. Also consider breaking this
amount down into smaller goals that you can more easily prioritize, manage and track.
4. Protect your plan and your legacy. Ensure the beneficiary information on your accounts is
up-to-date and that you have the right insurance and protection plans in place to safeguard
your income and assets now – and for the long-term. Also begin thinking about the legacy you
want to leave – to your family or to organizations that are important to you. Involve your
loved ones in these conversations and clearly communicate your intentions and expectations.
5.Track your progress. As with all goals, it’s important to set milestones, check-in
and reflect as you go. Keep in mind that a little time and organization goes a long way.
Set aside one day each month to sit down with your finances, and also consider meeting with
a legal and financial professional annually. Even if your goals still seem far away or if
you’ve experienced a setback, you won’t regret spending the extra time to review your progress.
This also provides a good opportunity to make adjustments if your situation or plans for the
future have changed.
Retirement planning can be a complicated, emotional and overwhelming process. Consider
seeking objective advice from a professional financial advisor who can guide you through
it and ensure you’re aware of all your options. It’s important to keep in mind that the
surest way to feel confident about what’s to come is to do everything you can to prepare
Beth A. Nelson, CFP®, ChFC®, MBA, is a Financial Advisor with Ameriprise Financial Services,
Inc. in Oak Island, NC. She specializes in fee-based financial planning and asset management
strategies and has been in practice for 16 years. To contact her, call (910)616-8232. Her
office is located at 8509 E. Oak Island Drive, Unit 2, Oak Island, NC 28465. You may also
contact her through her website www.ameripriseadvisors.com/beth.nelson .
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2015 Ameriprise Financial, Inc. All rights reserved.