Retirement Considerations to Keep Top of Mind
Money anxiety in retirement is a sure-fire way to deflate the excitement of this new phase of life. Taking time to be strategic about your financial future is a simple step that goes a long way in easing much of the anxiety you feel related to your income during retiremen. One of the most important things to have in hand when entering retirement is a solid financial plan.
There are three key pieces of information that will lay the foundation for a solid financial plan, the first is your monthly spending amount. Determining how much you spend on a monthly basis is a savvy first move to developing a financial plan for retirement. It can also prove an effective way to trim the fat off of your monthly expenses. Start with the basics such as food, shelter, and comfort items and work your way down to granular levels where possible.
Take some time to work out exactly how much income you can expect to receive from social security. While this is easier to forecast the closer you get to retirement, there are tools available that can help you come up with an estimate. Be sure to account for any pension income as well.
Investment Income Needed
Now that you’ve worked out your monthly spending patterns and how much income you can anticipate from social security and your pension plan, your income gap can be determined. This will help narrow down how much money you’ll be needing from your investments on a monthly or yearly basis. This dollar amount will help inform your overall investment strategy.
Nothing is as crippling as fear when approaching the time for retirement. Having a strategic financial plan in place well in advance of your retirement will help ease your fears and help your wealth manager devise an investment strategy that supports your financial goals.