Continually evaluating how much it will cost you to live comfortably in retirement can help to make sure you are saving enough over time.
Let’s face it, planning for retirement is a long process and over the years, your goals, dreams, family, and current situations can change (Like COVID-19) so don’t waste time, act now. If your plans do change, it means the amount of money you need to achieve them may also change.
If you’re sitting there saying to yourself “I think I’m ok,” then you’re avoiding the work that really needs to be done.
For Instance:
-Have you processed Roth conversions?
-How much money do you have in your tax-free bucket?
-What’s your plan for paying less taxes in retirement? You don’t want to pay 50% or even 85% tax on Social Security and Medicare, right?
“How you spend your retirement dollars in retirement IS JUST AS IMPORTANT as when you were accumulating them.”
Here are other retirement planning strategies to consider.
Do you need to make any savings adjustments?
If you have not assessed your retirement savings in a while, some of the factors mentioned above may have made your goals unaffordable. If that is the case, you could consider adjusting your retirement plan so your savings are on the right track. You may need to go over your current budget and adjust it to save more money for your retirement. You can also consider increasing your income by taking on an extra job or looking for another, which pays a higher salary. Your calculations may indicate you need additional time to save, so consider options like delaying your retirement by a few months or years to give you time to save the money you need.
Do you need to rebalance your portfolio?
Your retirement portfolio may be composed of various assets that have different rates of growth. It is a good idea to reevaluate your investments to make sure they are delivering the returns you expect or want. If they are not performing the way you would like, you could consider rebalancing your portfolio. Making these adjustments often means altering the amount of risk you are willing to take. In any long-term investment plan, you need to expect swings at times of uncertainty. The stock market can experience volatility, so you will need to consider what your risk tolerance is for fluctuations in the value of your investments while you pursue your long-term retirement goals. There are many options to consider, such as fixed index annuities or cash value life insurance for tax-free withdrawals.
Should you increase your contributions?
Consider regularly increasing your 401(k) or Roth 401(k) contribution. If your company matches contributions, try to take advantage of their maximum match amount. If you have come into extra money via an inheritance, a raise or bonus at work, or a sizeable tax return, consider using that money to bolster to your retirement account. If you have the means, it is in your best interest to contribute as much as you can before you retire.
Reassess Your Budget Once a Month
Can you cut the cord? Do you have too many subscription services? It’s important to stay on top of your income and spending by looking over your budget monthly. You may need to make adjustments along the way as your financial situation changes. You can also work on reducing your fixed expenses, such as your mortgage, rent and insurance rates, or try and cut down your variable expenses, such as your grocery bill, utilities and transportation costs. If you would like our budgeting worksheet please email us at info@commonfinancialsense.com
In the end, we help investors better prepare for their future.
Our Common Goals Are:
1. Preserve Assets And Earn Income
The portfolio is invested in relatively safer assets, with the primary objective of preservation of capital, along with a secondary objective of producing income.
2. Lower Volatility
The portfolio is designed to have lower volatility overall than its benchmark indexes, with the goal of producing more consistent long-term returns and more modest drawdowns.
3. Reduce The Risk Of Major Principal Loss
A portion of the portfolio is either invested in relatively defensive assets or the portfolio is hedged to reduce equity drawdowns during periods of market volatility.
4. Pay Less Taxes in Retirement
If you would like to see a general example of all this or would like to see one based on your situation contact us 773-255-0411 or info@crosspointwealth.com
You Can Also Schedule Your Complimentary Strategy Call Here.
Until Next Time…
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