Let me ask you a question that may be awkward or even painful to answer: Do you have a retirement plan in place?
“I’m too young to think about retirement” is not a good answer.
“I have a plan in place, but I haven’t reviewed it for a few years,” while that’s a better answer, still isn’t a good answer.
“Yes, I have a retirement plan in place, and I review it with my financial planner every year” is a great answer…but now, honestly: Is it your answer?
If it isn’t, what follows is for you.
A few questions are in order. It’s best to answer them with your financial planner, rather than on your own. Start with enumerating what you have on hand: money in the bank, assets such as CDs, money market funds, gold….even rare coins.
Now how about stocks and bonds? Are they performing as you would like? Is your financial planner happy with the way they’re performing? Or is it time to re-evaluate your portfolio and make some changes?
What’s that? You don’t have a financial planner? Or you do, but you’re not happy with him or her? That’s a big “oops!” You need to get one…or get a new one.
What’s your income stream like at present? Assuming you’re still working, what’s your annual income? Aside from stock dividends, what other sources of regular income, if any, do you have?
Is your saved money growing or shrinking? Does your lifestyle exceed your income, or are your cash reserves and other savings growing every year?
What do you expect your lifestyle to be when you retire—lavish, cautious, or somewhere in between?
Are you prepared for the likely eventuality that your older years will bring increasing health issues, that you may need long-term care or even a private nurse to avoid having to stay in a facility? If you need to move to assisted living, will you be able to afford one of the nicer places? Do you have an HSA (Healthcare Savings Account), and if not, can you afford to start one?
Do you have a 401(k), IRA, or other retirement accounts? What is its current value, and what is its likely value if you retire at 62 or 68? Can you increase your contributions to it?
Do you plan to work beyond the so-called “retirement age,” and if you are employed rather than self-employed, can you be reasonably sure your company won’t institute mandatory retirement?
If you are a solopreneur, are you prepared for the possibility that a health issue, such as a stroke, could force you into retirement sooner than you wanted and severely limit your finances?
What is your expected Social Security monthly benefit if you retire at the earliest age possible?
Have you considered buying, if you don’t already own, rental property to generate income going forward now and into retirement?
These are the main questions you need to ask yourself, even if they’re uncomfortable. If you don’t ask yourself now, and take the needed steps to improve your position, you face an even more uncomfortable future.
Speak with a member of our team at Americas Retirement Headquarters today.