Yes, yes. You have a million things going on, and retirement planning may be the furthest thing from your mind. But it really shouldn’t be. In order to be well-prepared for retirement, you need to start now regardless of where you’re at in your career. Here are five financial requirements you should focus on as you prepare for retirement:
Five Retirement Planning Tips
- You should have no debt of any kind. No credit cards, no mortgage, no student loans, no cosigned loans with family or friends and no home credit line. You should have an approved homeowner’s line of credit in place for emergencies.
- Your home should be in near perfect condition. The roof, the furnace, the paint, the gutters and such should all be new or near new. If not new, you should have a reserve of money in the event you need to replace them. Any other remodeling you want to do should be done or you should have the cash reserved for the work.
- Buy the car you will drive for 15 years at retirement and pay cash for it. Yeah, it may be an all-wheel drive Subaru, but there is a reason so many retirees drive them.
- Fully fund your retirement account every working year to the maximum allowed. If you have not fully funded every year you have between now and retirement to get after it and get it caught up.
- Project your retirement budget and adjust it to meet your expected retirement income. You should know your monthly social security and retirement benefits in advance to see if they square up with your expected expenses. And be real about those expenses so you and your spouse know the plan before you retire. You might have to reconcile your expectations with financial reality, but do it before the reality hits.
Even those these are the five financial requirements that I advise others to follow, it’s the road map that I follow as well.
If there was a number six it would be to ensure you get enough cardio exercise – no less than five times a week for at least one hour. You should be healthy so you can enjoy the retirement. And if I had a number seven it would be to have a life plan that keeps you engaged, energetic and vibrant.
Retirement Planning Help
Whether you’re just starting out or you’ve been at it for quite some time, know that retirement planning is critical to your financial success once you retire. If you need guidance or additional insight on how to best plan for your retirement, contact Rea & Associates. Our team of Ohio tax professionals can help you put together a plan to ensure you’re on a good path to retirement.
Author: Lee Beall, CPA (Dublin office)
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