Nearing Retirement? Consider These 4 Essentials

After working for decades, your well-deserved retirement is no longer a distant goal. It’s right around the corner! As you start thinking about your official retirement date – but before you circle it on your calendar – it’s a good idea to take another look at your financial plan. Focus on these four factors.

1. Your Ideal Retirement Lifestyle
How do you want to spend your retirement? This could include traveling, volunteering, or spending time with family. Also, where do you want to live? Maybe you plan to stay in your current home, downsize, or relocate. Having a clear idea of your retirement lifestyle will give you a better sense of your financial needs.

2. How Much Money You’ll Need
About 61% of adults worry they won’t have enough money at retirement, according to an AARP survey. Comparing your future retirement income to your anticipated spending will help you plan.

• Calculate your anticipated expenses, including housing, day-to-day needs, and discretionary expenses like vacations. From there, create a realistic retirement budget. 
• While you’re still working, try “test-driving” your budget for a few weeks or more. See how well you can stick to your projected budget. This can help you identify spending areas you may need to adjust. 
• Now is a good time to take stock of your retirement income sources – such as a pension, Social Security benefits, and retirement plan distributions – to see how well they line up with your budget.

3. Your Retirement Savings Strategy 
Many people try to give their savings an extra push right before retirement. There are simple ways to do that. 

For instance, if you’re still working, make sure you contribute enough to your workplace retirement plan to get the full company match if one is offered. 

People over 50 can also make catch-up contributions to their IRA or 401(k) plan. In 2024, eligible savers can contribute an extra $7,500 to their 401(k) plan or an extra $1,000 to their IRA (beyond the standard annual limit). 

At this age, protecting your savings should be a priority, as your finances have less time to recover from market turbulence. Consider moving funds from high-risk equities to products offering more stability, such as federally insured accounts or certificates.

4. When to Start Social Security
Consider the long-term impact of claiming Social Security benefits early (as early as age 62) versus waiting until your full retirement age or later – which increases your monthly benefits. The right choice depends on your ability and desire to work past retirement age.

Remember: Social Security benefits typically cover only 40% of someone’s pre-retirement income, according to the Social Security Administration. 

Based on the income sources you’ll have in retirement, an experienced advisor can help you create a retirement income strategy that balances your short-term financial needs against long-term factors such as growing your portfolio. 

Plan for Success
Are your finances on track for retirement? Our experienced Financial Consultants will work with you to identify your specific needs and goals for retirement, help you create a custom plan, and put your plan into action. Get started today.