Why Using a Financial Planner for Retirement Is Just Smart

A financial planner is someone who has a specific set of knowledge related to helping you plan for your long-term financial goals. These individuals can analyze your present status and give you the guidance you need to plan for any major life event, including things like having a baby, buying a house, or even retiring. Here are some of the main reasons why it is always better to use a financial planner when it comes to your retirement.

#1 – Things Happen

Maybe you are in your 30s, you have a decent chunk of change in your 401k account, and you have a great job. Things may be going well right now, but what happens if you get laid off and you need money? Diving into that 401k is going to cost you a pretty penny in penalties, and you will essentially rob yourself of part of your retirement savings. A financial planner has the knowledge and expertise to help you allocate your savings wisely so that you can deal with these unexpected issues.

#2 – Economies Change

Let’s say that you want to retire with $150,000 in the bank. For most people, this is a reasonable goal and one that is perfectly attainable. However, take the time to consider the rate at which the economy changes. A gallon of milk may cost you $5 now, but what will it cost in 20, 30, or even 40 years when you are ready to retire? That $150,000 may not stretch as far as you had hoped, and you might find yourself in trouble. A financial planner can help you estimate cost of living increases and plan for these early.

#3 – Your Health Can Change

Many people start off strong when it comes to saving for retirement, but then a health crisis strikes and they find themselves in a bind. A professional, expert financial planner can work with you from the outset to help you allocate funds for a variety of situations – including long-term health issues. Even if you find yourself unable to work and the recipient of short-term disability benefits for a period of time, a good planner can help you make the most of those funds.

#4 – You Might Need to Identify Some Money Pits

Many people make more than enough money to save and invest in their retirements but seem to have trouble actually finding those funds when it comes to contributing to an IRA or other form of account. Financial planners excel mainly in one area – budgeting. They can help you determine where your money is going and what you should do to make sure it starts going to the right places. For instance, maybe you can cut back on your premium cable channels and put that $50 a month into an account. Over the course of 30 years, those savings alone add up to $18,000. Imagine the possibilities if you could find a few other cutbacks.

Many people truly believe that they have all of the knowledge and expertise it takes to plan for their own retirement. However, things and circumstances can change in the blink of an eye, and these are the times when having an expert financial planner on your side can make a tremendous difference.

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How to Downsize the Right Way after Retirement

When the topic of retirement is raised, many people conjure up images of silver-haired folk traveling the world or puttering about in their gardens or garages. One of the best ways to enjoy these years to the fullest is to ensure that you are able to downsize your life accordingly after you have finished working. Below are a few tips that will help reduce your overall responsibilities and enable your retirement savings to last for as long as possible.

Consider Moving House

If you have children, chances are that you may still be living in a relatively large home even after the last one has successfully flown the nest. As a result, you could be spending a lot more on utility bills and property taxes than necessary, which will in turn eat into your retirement savings. Relocating to a smaller home will not only yield tremendous financial savings for you; it could potentially leave you with a lot more free time to enjoy your retirement in that you will have a lot less cleaning, yard work and overall home maintenance to worry about.

Enjoy your Living Space

Although it is usually necessary to downsize your home after you have retired, you need to ensure that you don’t go overboard in this regard. When moving into a smaller home, it is crucial that you and your spouse will still have enough space to continue pursuing your hobbies and interests without getting agitated with each other. For example, if you enjoy spending time sewing and your spouse spends a lot of time doing woodwork in the garage, ensure that your new home will still have enough space for both of you to enjoy yourselves.

Evaluate your Transport Situation

During your working years, it may have been necessary for you and your spouse to own separate vehicles because of conflicting work schedules. However, after retiring, you may find that you only need to keep one of your vehicles for your transportation requirements. Selling excess vehicles can help boost your retirement savings substantially in that you will be able to reduce your vehicle payments as well as the amount of money spent on gas and overall care and maintenance each month.

Don’t Alienate Everyone

When downsizing after retirement, it is not always necessary to move town or even out of state. In fact, you will normally be able to relocate within your neighborhood or even close to it, which will allow you to still remain close to friends and family in the area. Staying in a smaller home in the same neighborhood also means that you will not have to give up any activities that you may be regularly involved in, such as bridge clubs, gym classes or other community events.

Downsizing after retirement does not mean that you will have to be miserable for the rest of your life. In fact, if you plan correctly, your retirement years could very well end up being the best years of your life.

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How to Budget your Pension and Social Security to make it Last

One of the biggest concerns voiced by retirees is that their pension funds will not be enough to last them for the rest of their lives, especially when inflation is taken into consideration. However, the advice below will enable you to plan your retirement in such a way that your pension funds will be more than sufficient to last you well into your golden years.

Examine Withdrawal Rates Regularly

It is crucial to examine your withdrawal rates at least once a year, as this will help determine whether you are living off the interest of your retirement fund or whether you are spending your capital. If you find that you have been digging into your capital, it may be time to reevaluate your expenses. In some cases, it may be a good idea to schedule an appointment with a reputable financial advisor to determine whether it will be beneficial to move your fund elsewhere to help preserve it. A good rule of thumb is to ensure that your withdrawal rate does not exceed 4% of your account balance during any given year.

Consider Working Part-time

If you are physically able to continue working, it may be a good idea to scale down your hours instead of giving up work completely when reaching retirement age. This will help reduce the amount that you need to withdraw from your retirement fund, which will make it last a lot longer. In addition, you will be able to keep yourself occupied for at least part of your retirement, as many folk find themselves at a loose end if they suddenly stop working altogether when reaching 55, 60 or 65.

Check Your Budget Carefully

Not everyone is physically able to continue working after they reach retirement age. If you fall into this category for any reason, it may be a good idea to re-examine your monthly budget and reduce expenses wherever possible. Relatively easy ways to do this would be to consider downsizing to 1 vehicle, requesting senior discounts for products and services that your purchase regularly, moving into smaller or more affordable accommodation or even perusing your grocery budget to find possible options for reducing your expenditure.

Remain Debt Free

Your pension and/or Social Security payouts will not last very long if you have to finance debt repayments from them, especially when you take into account that interest that you pay on debt is always far higher than that received on your investments. Before retiring, it is essential to repay all outstanding debts in full, as this will allow you to spend your retirement fund on other essentials – and a few fun purchases, of course.

Preserving your retirement fund and/or Social Security payments by not spending frivolously will provide you with absolute peace of mind, because you will not have to spend some of the best years of your life worrying about being a financial burden to your loved ones at any time.  

 

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Financial Decisions You Need to Make in 2016 to Get Ready for Retirement

Retirement is normally one of the last topics of conversation on anyone’s mind, especially when they are still in their 20s, 30s or even 40s. However, you will need to ensure that you and your loved ones will be taken care of once you reach retirement age, and this can only be done by making the right financial decisions well in advance.

Start Saving Now

If you have already started saving between 10% and 15% of your current income towards your golden years, well done. You are among the minority of folk who are taking their retirement seriously. However, if you have not started saving yet, you need to start now, regardless of how old you are. For example, saving $5,000 a year from the age of 25 will give you a retirement fund of almost $800,000. However, if you wait until your 40s to save this amount, you will only have around $285,000 to your name by the age of 65. Make compound interest your friend and start saving for your retirement today.

Purchase Sufficient Health Coverage

Before deciding when to retire, you will need to ensure that you have sufficient health coverage, regardless of whether you will qualify for Medicare or whether you will have to continue paying out of pocket for some of your healthcare costs. If you are still young but have been diagnosed with health conditions, you will most likely need to purchase additional coverage to ensure that these needs will continue to be fully met after retirement as well. The earlier you plan ahead with regards to your medical care, the more affordable it will be for you after retirement.

Eliminate Debt

This is one of the most crucial steps to take in order to enjoy your retirement years. Debt has the ability to eat away at income and investments at an alarming rate, which can make the different between enjoying a comfortable retirement or having to scrimp and save to afford the bare essentials. Using the traditional debt snowball method will help you to eliminate your debt, which will in turn enable you to live as comfortably as possible. An added advantage is that when you have no debt to repay, you can increase the amount you are paying towards your retirement fund, which will help them grow quickly.

Prepare for the Unexpected

In the event of your death, you will need to know that surviving loved ones are going to be properly cared for. One of the best ways to do this is to ensure that you draw up your final will and testament as soon as possible. All of your assets, such as vehicles, retirement accounts, properties and savings accounts should be listed and your will should clearly stipulate what needs to be done with them or who should inherit them. It is also imperative that you advise your family on what should be done in the event that you suffer from a stroke or are diagnosed with other terminal conditions such as dementia, Alzheimer’s or cancer.

If you have been unsure of where to start with financial planning for your retirement years, get in touch with us today. We will help ensure that you will be able to retire as comfortably as possible.

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