Tranel Talks Column

Preparing for Retirement in 7 Steps!

Preparing for Retirement | Let us Help!

Retirement is a huge milestone in your life, and you should be able to approach it with confidence. However, most people have some combination of fear, uncertainty, and excitement as the time draws nearer for them to retire and live the life they’ve always dreamed of.

The Tranel Financial Group would like to alleviate some of your worries about preparing for retirement! These 7 steps can assist you in becoming financially prepared for the next phase of life – and also be prepared to enjoy it!

1. Determine Your Retirement Goals

Childhood isn’t the only time you get to make big plans! Consider what you want to do after you retire, not what you have to. The planning stage is an EXCITING time when you get to think about ideas and goals, not money. By prioritizing your retirement goals, you will take much of the UNCERTAINTY out of retirement.

When listing the things you want to do during retirement, whether it’s travel, volunteer work, hobbies, or spending more time with family, be specific.

  • How many trips do you want to take a year?
  • Will you travel by plane or buy an RV to visit family?
  • How many days a week do you want to volunteer or participate in your hobbies?

Asking yourself these questions will get the ball rolling. You should also be practical and set goals that are within reach. If you don’t know where to start, take the MY RETIREMENT QUIZ to get a better idea of how you should prioritize your retirement in order to be happy and comfortable in the future.

2. Think About Income

Ok, now it’s time to look at the financial side of those goals. Your assets for retirement include retirement pensions, savings, and investments, but they can also be talents, hobbies, and knowledge that you have – things you could potentially make money with even after you retire! By building relationships on social media and in person with like-minded people, you may be surprised to find alternate income sources that you enjoy, even after retirement!

You should constantly reevaluate your retirement savings plan and make adjustments along the way, especially if you have a long time until retirement, like after major life events like marriage or the addition of a child to your family. The younger you are when you start planning, you may have to reevaluate and redirect your retirement plan several times throughout your working life, but that can actually result in saving more than you initially intended!

3. Create a Retirement Strategy

That is, if you don’t already have one! This is the step that often requires the help of an experienced financial planner.

Your savings strategy should be based on your age, and it should have multiple layers that will allow you to invest and save for retirement, but you should also be able to access some of the money you have set aside for emergencies. You should also decide at an early age when you will begin collecting Social Security. Tranel Financial Group will help you decide if you should wait as long as possible because the benefits are higher for you and those you’ll leave behind one day.

You need to be proactive about retirement savings if you change jobs, like maintaining tax-deferred status on tax-deferred annuities such as a TSA or 403(b). Rely on the guidance of a trusted professional if this seems like too much to take on by yourself! The Growth and Income Bucket Strategy is our tried-and-true retirement investing tool, which takes into account inflation and taxes, prepares you for an uncertain time horizon, and minimizes emotions like anxiety and fear concerning retirement.

4. Make Health a Priority

It will be hard to enjoy the golden years of your life if you are sick. Knowing that you could have prevented an illness that limits you physically or financially will be both frustrating and depressing.

Therefore, have preventative care done throughout your life, even dental checkups! Start exercising to strengthen your body and reduce the risk of injury, and eat healthier to reduce your risk of heart disease, diabetes, and other diseases associated with age and lifestyle. Stop smoking to decrease your cancer risk and improve lung function. If you haven’t always done these things, it’s not too late to start. Every year of healthy living adds valuable time to your retirement years!

Feelings of isolation are common after retirement, especially for those who have worked outside the home their entire lives. These feelings can lead to depression and increase the symptoms of mental illness. Therefore, as you get older, you should build and maintain relationships with family and friends to keep your mental and emotional health in check as well!

5. Save Money

You should definitely enjoy the stage of life you’re in, whether you have young children, are planning for cars and college, or are nearer to retirement age. However, by cutting a few expenses here and there, you can add thousands of dollars to your retirement savings each year – money that can draw interest and work for you when you need it most!

Eating out less and cutting out non-necessities like cable television or your morning latte are just a few ways you can save more money. We recommend that clients keep a very honest, detailed budget journal of their current spending to see where their extra money goes, so they know exactly how much they have to save – in addition to what they’re already putting back each month. If you have the opportunity to pick up a side job or overtime, earmark that cash for savings so you can really appreciate its long-term effects on your budget!

Download a copy of ‘Eight Things I Wish I Knew Before I Retired’ to see why saving now can lead to a debt-free, stress-free retirement where you get to realize dreams that weren’t possible when you were part of the workforce!

6. Decide If You Will Work

Some people simply enjoy working, but they want to do it on their own terms. Other retirees know that it will be necessary to work so they can afford everything they want to do in Step 1! In either case, you will need to think about a few things before preparing for retirement:

  • Where you want to work now that you have the opportunity to be more selective
  • How much you want to work, from a few hours every day to 1 or more days a week
  • Income permissible by Social Security, which a financial professional can help you define

All these factors are important in determining what type of job you have after you retire. You could work part-time or not at all – or even go into business for yourself with the right planning! Retirement is not the time to consider this decision because fear about money and stability will play in too heavily.

When you SCHEDULE YOUR COMPLIMENTARY MEETING with a Tranel Financial Group specialist, he or she will help you make this and other financial decisions based on what you hope to accomplish during retirement, not fear that you will outlive your savings or have healthcare costs that burden your family!

7. Create a Retirement Budget

Based on all of the steps above, write out a monthly budget that is realistic. Include income from investments, hobbies, work, and any other source you can think of. Then factor in your basic necessities and debt, plus the things you plan to do in Step 1. Many of our clients get overwhelmed and experience some level of panic during this planning stage because they finally come face to face with a retirement budget that will not allow them to do the things they hoped.

To minimize that feeling, go to MY RETIREMENT CALCULATOR to get an idea of how much you’ll need to save in order to live your best life in retirement. You can also start paying attention to your budget now, asking yourself if this is the lifestyle you’ll want to maintain in retirement. If so, Tranel Financial Group can help you create a budget for retirement that will help you do just that!

Our financial experts are highly trained with years of experience, with a focus on long-term saving and investing. If you don’t know where to start or you think it’s too early (or too late) to worry about retirement, set up a complimentary meeting with our team to get the facts about planning for retirement at any age!