Five Tips for Creating an Effective Retirement Plan

money - collection lawPlanning for retirement can often be a time of great anticipation as well as great anxiety. Overwhelming uncertainties can creep into your plans and threaten to burst your balloon before it is even fully inflated.  The following five tips can help you create a solid financial plan that will allow you to enjoy your retirement and the fruits of your labor.

1. Know how you want to spend your retirement.  To some this may seem like a strange tip, however, many people do not plan past the idea of no longer working. They never take the time think about what will occupy their time once they retire. Your future plans will help you create a better financial picture for retirement. Do you dream of spending your time in tropical destinations?  If so, you might need to put a bit more into your retirement fund than if your goal is to stay closer to your current locale. This crucial first step will help you create a realistic plan that will enable you to spend retirement in the manner you always hoped.

2. Know your benefits. Once you retire, there is a good chance you will not receive the same benefits as when you were employed. Talk to your organization’s human resources personnel well before your retirement date, and consider items such as health insurance, pension and stock options.  Each of these things could have a big impact on your finances once you are retired.

3. Think about diversifying stock options. As you approach retirement, it is important to ensure that you do not have an over concentration of stocks in just a few funds. This can often be a problem for upper level employees who have a great deal of stock tied up in their company. What they fail to think about is once they retire they will not have the same level of control in the direction the company takes – the stocks that were once of great value could plummet. It is important to remember that putting your eggs in just a few baskets is never a good idea. Consider selling some of your stocks and diversify your portfolio before you retire to ensure this does not become a problem for you.

4. Move towards stable investments.  It is typically suggested that your pre-retirement (employment years) portfolio contain diverse investments that offer a higher yield.  However, once retirement hits, it is a good idea to have a higher percentage of your investment portfolio be in fixed, stable investments.

5. Be prepared with a solid plan. One of the best ways to enjoy a comfortable financial outlook in retirement is, is to have a clear understanding of how much you will need to set aside in order to retire.    How much will you need to live the lifestyle you currently enjoy, or what things do you plan to cut out?  Have a firm grasp on your current assets and what additional assets you will need.  Take some time to write these things down in a solid and workable plan. This will help you to start your retirement years with confidence, keeping unwelcome financial “surprises” to a minimum.

Retirement should be a time of great joy and relaxation. Careful planning for this life stage is a vital part of ensuring the goals you have set will be attainable. One of the best ways to prepare for the retirement of your dreams is to meet with a certified financial advisor (we recommend a fee-only advisor) to create a program that meets all your future needs.

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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