4 Steps to Retiring When You Want

Are you on track with being able to retire when you want to? It’s so easy to procrastinate about saving and investing money for your retirement – especially if you’re still years away. While  starting early makes it so much easier to meet your retirement goals, it never hurts to start based on where you are today.

Saving steadily and starting now can make it possible for you to retire with greater comfort.  Keep in mind that I don’t know of anyone who reached retirement age and complained that they saved too much!

Implementing the steps below will help you learn when and how you can retire.  Follow these steps to get yourself quickly on track:

Step 1. Take an assessment. Where are you right now financially? How much have you saved so far? What is your current income? What are you current expenses? How much are you currently saving? Do you understand how it is invested, how much it is earning and how much risk it is exposed to? What changes can you make right now that will make the biggest difference? Do you need the advice of an expert?  Your best plans for moving forward toward your goals begin with an accurate idea of where you are right now.

Step 2. Make a plan. Make an honest evaluation of how much money you’ll most likely need to retire and live comfortably for the remainder of your life. Then take a look at how much you need to save between now and then to make it happen. Include other money that goes into your plan as well. For example, if your employer matches 100% of your retirement plan contributions, you only need to put in half the required amount. If you’ll have other income in retirement, like rental or social security income or money from a business or trust, include those in your figures.  There are many financial planning calculators available online to help with your planning or work with a fee-only financial planner to help you create a target. Then, track your progress each year to see if you are staying on course.

Step 3. Start saving today. Most of us would rather buy a new TV today than save for a retirement that might not happen for 20 years. If you can enroll in a program that has automatic deductions, like a company 401(k) plan or an automatic-deduction brokerage account, saving can be a lot easier.  How you save isn’t nearly as important as the saving itself. Just start immediately! Even a relatively small amount can add up over the years.

4. Consider These 3 Factors. The 3 most important factors to your success are the rate of return, the amount of money being saved, and time.  So:

• invest strategically  by diversifying what you hold  so you are taking on some risk but not so much that you can’t rebound from a downturn in the market
• create a safety net of money in cash savings and CDs to cover 3 to 6 months of living expenses and then continue to invest and save as much as you can based on the target number you created in #2 above
• start as soon as you can and if you are starting late, you may need to delay retirement, trim expenses or evaluate ways to create additional streams of income, such as through part time work, freelancing, etc.

Imagine how much better your retirement savings would be right now if you had developed a plan and implemented it 10 years ago. Rather than wondering and worrying, get some clarity on these issues. Talk with a professional and get specific guidance on your situation.

Don’t wait another day. Today is the day.