4 Tips for a Financially Stable Retirement
Even if retirement seems like it is far off in your future, it is never too soon to begin retirement planning to optimize your financial position in your retirement years.
Retirement planning includes determining your time horizons, creating a spending budget, tax planning, establishing your risk tolerance, and estate planning, which should all be integrated into a fully comprehensive plan with the help of a financial professional. Below we outline four tips to help in planning for a financially stable retirement.
Tip #1: Start Planning As Soon As Possible
The sooner you establish a plan and start investing for your retirement, the greater your chances will be of meeting your retirement goals. Whether you put money into interest-bearing savings accounts or investments, the longer the money is there the more you will benefit from the power of compounding of interest or reinvested investment income, in addition to any market value increases on investments.
Tip #2: Establish Realistic Goals
It is important to determine how much you will need for retirement. It is estimated that most people will need 70 to 90 percent of their pre-retirement income to maintain the same lifestyle post-retirement. To help establish a realistic financial picture, determine what your budget is today and then think about what your budget may be when you retire.
You will need to define your retirement lifestyle goals and how they may differ from your current lifestyle. For example, you may wish to travel extensively in retirement or purchase a vacation property. Remember also that much of your current budget may be going to pay your mortgage which should be fully paid by the time you retire, so take this into account.
Tip #3: Don’t Touch Your Retirement Savings
No matter how tempting, it is crucial to not withdraw assets from your retirement investments. Do not be tempted to use your savings to buy the newest car or the most advanced electronic devices or to keep up with your neighbors’ lifestyles. Live within your own established budget.
Having an emergency fund that can cover up to six months of expenses in the case of a sudden financial crisis such as a job loss or illness will help protect your retirement investments.
Tip #4: Keep Your Retirement Plan Current
It is important to revisit your retirement plan at least annually with your financial advisor to ensure that it is still on target to meet your retirement goals.
Any change in your financial situation such as moving to a cheaper or more expensive home, spending significantly on home maintenance or renovations, an employment earnings increase or decrease, an inheritance, etc., should be immediately addressed with your financial planner so that your retirement plan (and financial plan) can be adjusted accordingly.
Continue to Grow Your Wealth in Retirement with Bloom
Just because you’ve retired, doesn’t mean you should stop investing to grow your portfolio. Ideally you should be able to support your retirement lifestyle goals as well as invest your remaining funds for continuing returns. With proper financial planning and an effective balance between growth and income, you will continue to be in a better financial position to do all things you had hoped to do in your retirement.
For over 38 years, Bloom Investment Counsel has specialized in investing in income-generating investments, specifically dividend-paying stocks. In addition to growth from investing in the stock market, dividend-paying stocks can help you generate income, which can be particularly helpful during your retirement years by providing a steady stream of cash flow. We would be pleased to work with you and/or your other financial partners to share our expertise and help you make informed investment decisions helping you achieve a worry-free retirement. Call us at 416-861-9941 or email us at info@bloominvestmentcounsel.com
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.