We often dream about the freedom of retirement. Perhaps you hope to travel the country by RV, purchase a seaside cabin or gift your grandchildren funds for college. But have you thought about how to make these wishes happen? It’s never too early (or too late) to start thinking and planning for your retirement.
Work through the six questions below to put the wheels in motion toward financial security after you collect your last paycheck.
6 Questions to Ask Yourself to Plan for Retirement
Our retirement years can account for as much as one-third of our lives. With Americans living longer than ever before, the idea that retirement is a time to slow down is outdated. Instead, consider retirement as the life phase after you’re done working. It’s not uncommon for retirees to go back to school, take on a new hobby or pursue a life-long dream. These plans require financial stability, so get your retirement plan started by answering these six questions.
1. Does your current employer offer a retirement plan?
Whether it’s a 401(k) or company investment planning opportunity, speak to your HR department to learn more. You may discover that your company offers matching funds up to a specific percentage of your contributions or free stock shares after you’ve been with the company for several years. That’s free money! Don’t ignore these offers.
2. Are you self-employed?
If yes, you can also get in on investment opportunities. Instead of working through an employer, you can contact a financial institution directly to set up a wealth management portfolio. For example, here at Elevations Credit Union, our team of CFS* Wealth Management Advisors assist ambitious entrepreneurs and small business owners each week with retirement income planning through 401(k)s, Roth IRAs, traditional IRAs, annuities and more.
3. What do you want to do in your retirement?
If you’re thinking of working toward a master’s degree or want to spend a year living abroad, can you quantify that endeavor? How much will it cost to live your dreams and maintain your daily expenses, such as property taxes and insurance on your home?
We love using this worksheet from the Teachers Insurance and Annuity Association of America (TIAA)**. Or, consider working with a CFS* Wealth Management Advisor at Elevations Credit Union. They can help you map your short- and long-term financial goals and understand how to invest your hard-earned dollars so your retirement can be as you envision it.
4. When do you want to stop working?
This is up to you, with some input from your employer. For example, does your workplace offer a retirement incentive for staying until a specific age? Will a pension only kick in if you remain employed for a set number of years with the company?
Keep in mind; you won’t be able to partially draw on social security funds** until age 62 (with full benefits at age 66 or 67), and Medicare health coverage isn’t available until age 65. If you plan to retire early, an individual healthcare coverage plan can be purchased from the government or a private healthcare provider.
5. How long will your retirement last?
This is a tough one to estimate. To start, how long did your grandparents live? Are your parents in good health? In general, we recommend that individuals save for 25 years or more after they stop working. Your retirement planning should yield enough money to live comfortably, cover medical bills, pay your daily expenses and allow you to tackle your dreams.
6. When should I start investing?
If you haven’t started planning for retirement yet, it’s OK. Start today. The sooner you invest your dollars, the longer they will have to mature and grow. We often hear that individuals avoid saving for retirement because they don’t think they can put away enough money each month to make a difference. However, even a modest contribution each month will earn interest and grow over time. It’s never too late to start planning and saving for your future.
Once you have an idea of how you want to enjoy your senior years, and when you plan to retire, we’d love to sit down and chat about your financial options. In addition to an employer’s retirement program, we can set up individual accounts to help diversify your savings methods and meet your retirement goals. Learn more about wealth management and retirement planning online, use our free calculator or schedule an appointment to speak with a CFS* Wealth Management Advisor today by calling 303.443.4672 x2240. We can set up a no-obligation appointment to discuss your options further and answer any questions you may have.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC)** and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Elevations Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
** This link leads to a third-party website.