Planning Ahead to Reach Your Dream Retirement
As seen on The Rhode Show
Retirement is synonymous with freedom and enjoyment: a special time to enjoy family, friends and the other activities in life that we find rewarding. Ask yourself; what are your retirement dreams? Do you wish to travel, own a summer house, a boat? Retirement planning begins by reflecting on your retirement dreams so you can plan ahead to address any additional spending needs related to those goals.
When Should I Start Saving?
Your 20’s and 30’s are the ideal time to start saving, but if you get a later start, it’s not too late - just be prepared and take advantage of everything you can to push your retirement savings plan into high gear.
- Know your funding needs for your dream retirement and start saving now to cover any shortfalls.
- One of the easiest and most tax effective ways to save for retirement is to maximize your contributions to a retirement account at work.
Budgeting and Creating a Financial Plan for Retirement
- Define how long you will need retirement funding. It is important to consider at what age you would like to retire. Selecting a target retirement date allows you to identify a start date for calculating your expenses to confirm when you can afford to retire.
- Determine how much funding you will need. Assess all of your sources of retirement income, such as pensions, social security, 401k benefits and dividends on investments. Then calculate the annual spending you anticipate you will need, incorporating the associated expenses of your retirement goals into your financial plan (i.e. travel costs).
- Calculate how long your assets will last based on current and future anticipated spending.
- Last, integrate the budget you’ve created into a comprehensive working document. Your financial plan should also include an assessment of future changes in financial needs that may occur before and after your retirement date (i.e. paying down mortgage and other debts and cost of living - food, car, insurance, etc.)
Your financial plan should be a living document that changes with you as your life circumstances change. The financial plan will include illustrations that show how long your assets will last and will provide additional planning solutions to address shortfalls or potential risks to your retirement funding. For example, your financial plan may identify additional protections like health care cost coverage, home insurance, auto insurance and disability or long-term care insurance.
Contact a Washington Trust Wealth Management Planning Officer at 800-582-1076, email us at firstname.lastname@example.org or visit www.washtrustwealth.com for smart advice that’s focused on your unique financial goals.