The earlier you begin planning for retirement, the better. However, if you are middle-aged with no current plan, don’t despair. There is still time. It’s never too late as long you start developing a consistent and solid plan. The better the plan, the more peace and security you will have in your golden years. Whether you fall into a high income tax bracket or you find yourself just getting by, you should indeed make retirement planning a priority– even if that means skipping that daily Starbucks or McDonald’s combo meal. Everyone’s financial situation varies, but there are some constants that will help you gain security so you can live it up during your retirement years. You worked hard. Don’t you owe it to yourself to have a good financial plan?
The easiest way to start is to begin at the beginning. What is your current net worth? If you don’t know, here is how you assess your total current net worth.
List All Your Current Assets
Take a look at the assets summary check list below
- Real estate equity
- Stocks, bonds, and mutual funds
- Checking and savings accounts
- Life Insurance
- Retirement Accounts
- Art, Antiques or Other Collectibles of Value
Make a list of all of the assets that apply to your current situation and organize all of the data into your current assets file.
Your Present and Future Budget
In planning for retirement, you will need to calculate a retirement budget. But in order to do that, it’s essential to go over both the fixed and variable costs. According to an article on CPAI.com, knowing which costs are variable and which are fixed is essential to planning a budget. On the subject of fixed costs they state:
Based on today’s prices, you can itemize the living expenses you anticipate. Food and utilities may increase in costs, but these are expenses that you cannot do without. Also, allow for property taxes, which do not vary whether you are employed or not, but which may offer tax relief to persons age 65 and over.
Regarding your variable costs, it’s best to know what questions to ask yourself about your current and future money situation and how certain expenses might be very easily eliminated. The article points out:
At retirement, you may own your home and not need money for mortgage payments… You may consider downsizing…You may also find that you’ll reduce your vehicle expenses with less commuting miles.
Show Me the Money…Grandpa!
Retirement doesn’t necessarily mean all income stops. On the contrary as every American—at least assuming it is still available for years to come—will receive some form of social security income for years worked. The number is based on the amount of earnings for each year you worked. Don’t forget to factor this number into the final retirement plan. You can get a benefit estimate from the Social Security Administration by calling 1-800-772-1213 or online at www.ssa.gov.
Other options for retirement income include a pension owed to employees if offered, after a certain number of years worked with a firm. Also include spousal income in your future income. Many couples do not retire at the same time. Be sure to factor in the income from your husband or wife during the years that s/he will still be working. Also if you haven’t already done so, set up an IRA. There are tax benefits for contributing and many options available. Another idea is obtaining Universal Life Insurance. This combines life insurance protection with investment options. Many companies offer this as an option so do a little research it may “pay” off.
A Professional Review is Prudent
Lastly, it’s always wise to meet with both a financial and legal team of professionals when seriously creating a retirement plan. You may not deem it necessary now. Maybe you are only 30 years old and thinking, I don’t want to look at wills at my age. However, consulting with a team of top legal experts and financial planners, guarantees the assurance and peace of mind that all your ts are crossed and is are dotted so you can retire with dignity and money. Take the proper steps now to ensure that your golden years will be filled with peace, adventures— if you crave them— and most importantly, security.
JUL
