Most people work the majority of their adult lives. The money that is earned enables us to have our basic needs met and then some. At a certain point during your working life, you look beyond the basics and are able to start saving some of your paycheck. You also start to build a professional team to assist in guiding and directing you. The team may include a financial advisor, banker, an attorney, and your partner, if you have one. Together, you develop a plan and eventually a “financial plan” for retirement. This all is a process which is gradual and happens over time.
Beyond your professional team, there are also a number of resources you can explore on your own through reading. Do your homework. Become familiar with options. Everyone in the industry has an opinion. You’ll need to apply some personal strategy to make your financial plan what you need and want it to provide.
When it’s time to retire, replacing your work paycheck with a retirement income isn’t as simple as it sounds. Creating a plan can help ensure your money will last through all your retirement years. During retirement there is a shift from saving money to managing income from what you saved. This is when your plan becomes vitally important. Having had a personal strategy and knowing your needs will have helped you prepare.
Personal strategy may include paying off personal debt. Carrying debt into retirement adds a whole different consideration when making your plan. The plan would also include how to best convert your savings into an income. Investigating your options here is critical and is something your financial planner can provide direction.
Where to begin making the plan? First, evaluate what are your retirement goals? How do you envision life during retirement? In a previous article, we explored continuing to work on a part-time basis or in a completely different field which might be less stressful but something you’re passionate about. Of course there is always the option of not working at all. Perhaps your goal is to travel or go on a mission trip. Once your goals have been evaluated, your professional team can begin to assist you in what you’ll need in savings to reach these goals.
No matter when you begin the process of preparing a financial plan for retirement, be involved, review regularly with your professional team, and stay focused.
Information provided by Susan Ray, The Reserve, 2727 82nd Place, Urbandale, 727-5927