For some people, the idea of financial planning induces nothing but stress. They know that it’s something that they need to do, especially if retirement is starting to loom closer, but there are a number of facets that make planning for that eventuality feel impossible. There are, however, a few things you can do to keep financial portfolio growing as you prepare for retirement–and most of them aren’t as scary as you think.
Commit a portion of money out of each check to savings. Look into whether or not your employer matches contributions made to your 401k program. If they do, you should contribute at least that much out of every check. If you don’t, you’re throwing money away! Starting from scratch, with no employer-sponsored baseline? Start with investing just one percent of each check toward retirement. You’ll be surprised by how quickly it adds up.
Diversify your investment portfolio. Yes, that’s one of the scary ones. If you’re not a financial guru, you may not have any idea how to start investing your money. Start with a place where you feel comfortable: choose a stock you’re familiar with, look into real estate investments, or choose another style of investment that makes you comfortable. If you don’t even know where to start, working with a financial adviser can be one of the best things you’ll ever do for your retirement savings.
Consider a retirement fund that will keep bringing in money. This will depend, in part, on how active you want to bewhen you retire. Do you want to keep working at least part of the time? Many professionals dread the thought of sitting around with nothing to do all day. Using rental properties as retirement income, maintaining a share in a business, or working on a part time basis are all excellent options for bringing in income while keeping you from becoming a couch potato.
Keep an eye on your debt. While it’s certainly important to save for retirement, it’s also important to work down debt prior to taking that leap. Having your mortgage paid off, for example, can be a huge relief when the time comes to retire and you don’t have that bill to pay. While you don’t have to enter into retirement completely debt-free, it is important to note that the more debt you have, the greater your retirement savings or income will need to be in order to cover it.
Be realistic about when you’ll be able to retire. Automatic retirement at 65 is no longer realistic for many individuals. People are living longer, in some cases long enough to outlive their savings. As you prepare for retirement, be sure that you have enough to allow you to retire when you’re ready and keep you living according to the quality of life you prefer for as long as possible. By thinking about this now, you avoid the possibility that you’ll reach seventy-five, eighty-five, or even ninety-five and suddenly discover that your retirement fund has run out.
Make sure that you consolidate your retirement accounts. Every time you change jobs, you need to go ahead and “roll over” the contents of your 401k to your IRA. You don’t want your money to just sit there where you have no idea how to access it when retirement comes, and if you change jobs frequently, it’s easy to lose track of where all of your retirement savings have gone. Instead, roll over your 401k any time you move on. Do you already have a few 401k accounts from previous employers that you haven’t consolidated with your existing portfolio? You’re better off hunting those down now, before you forget where all of them are.
Ready to start working with an investment team that will keep your financial portfolio on track? Contact us to see if we’re the one for you.