You need to be prepared for everything. And with the current retirement crisis threatening millions this decade, it’s time to dedicate your resolutions to retirement planning.
Did your New Year’s resolutions include retirement planning? If you made any at all, there’s a good chance at least one of them will be related to your finances. Wealth management issues like big debt or a small savings may be more top of mind on a day-to-day basis, but the beginning of a new year is a great time to tackle more long-term goals like retirement.
Here, CKS Summit Group gives the top four ways to stick to your retirement resolutions in 2020.
1. Create a Solid Budget
Planning your finances using a retirement budget can improve your peace of mind and lessen your stress about money in your golden years. Plus, calculating your budget will help you avoid spending too much of your nest egg too soon—a financial mistake many retirees make.
Start to create your retirement budget by gathering the following items:
- Bank account statements for the last six to 12 months
- Credit card statements for the last six to 12 months
- The last two pay stubs, if you or your spouse is still employed
- Last year’s tax return
Look for all of your recurring monthly, quarterly or annual payments. Do this for each expense item, then find the sum for each month. These are your fixed costs. Once you have these down you can begin to make a plan of what you can save and spend for retirement.
2. Set Practical Goals
Many of us dream about the magic workout or financial investment that will not only help us reach our goals but get us to the finish line faster. The reality is everyone has individual needs and a one-size-fits-all approach rarely succeeds. A better way to reach your goals is to identify practical ones.
The key to successful retirement planning is balance. This applies to having a balanced portfolio and a balanced approach to short and long-term goals. Setting unrealistic goals is simply setting you up for failure. Here are some attainable retirement savings goals to try:
- A monthly or annual amount. Instead of focusing on a final account balance, aim to set aside a specific dollar amount every month or for the year.
- A percentage of your salary. Many 401(k) plans are set up so that you select a percentage of your salary to contribute to the account. Saving a proportion of your income means you will automatically save a larger dollar amount as your paychecks grow.
- Enough to get a match. If your employer offers a 401(k) match, aim to save at least enough to get the full company contribution.
- Maximize the tax break. The federal government provides tax incentives to save for retirement that will help your savings grow faster.
3. Reap Your Benefits
Once you leave the workforce, the years that follow can be all that you want them to be—if you pave the way with a comprehensive financial plan that includes your benefits.
The three major elements of your retirement portfolio are benefits from pensions, savings and investments, and Social Security benefits. When should you apply? Social Security Administration recommends the following:
Generally, you should apply for retirement benefits four months before you want your benefits to begin.
- If you were born before 1938 and you met all other requirements, you could receive benefits beginning with the first full month you were age 62. However, if you chose to begin receiving benefits before age 65, your benefits were reduced to account for the longer period over which you’ll be paid.
- If you were born after 1937, you also can start your Social Security benefits as early as age 62, but your full retirement age is more than 65.To find out what your full retirement age is, use their Retirement Age Chart.
Choosing the month you start to get benefits is an important decision. If you plan to continue working after you reach age 62, it may be to your advantage to start your retirement benefits before you stop working.
4. Keep Up to Date with Your Portfolio
Having a retirement portfolio in place isn’t a “one-and-done” deal, and figuring out if you’re actually on track to retire can be one of the most difficult pieces of retirement planning. Even when you’re a well informed investor, you may sometimes question if you’re doing everything you should be to retire on time. It’s a good idea to check in on your investments at least annually to ensure that your portfolio is properly balanced and that you’re saving enough.
Having a reliable and knowledgeable retirement income planner will help you stay on track by assessing your investment risks, strategizing asset allocations and making your principal last.
Call the Experts
Celebrating 21 years, CKS Summit Group is a retirement income planning firm headquartered in Clinton Township, Michigan with clients throughout the United States.
Our focus is to bring you fresh new ideas for your retirement income. Our cutting edge tactical portfolios help our clients achieve safe, healthy growth of their savings and preservation of their principal balance.
We design plans which are specifically structured to limit downside stock market risk. This allows us to protect our client’s assets while providing them with strategies for achieving effective tax reduction and inflation protection.
If you’re looking for assistance in keeping your Retirement Resolutions in 2020, contact us here to set up your complimentary strategy session today.