Your retirement years can be your reward for a job well done – or they can be your worst night mare. Retirement is a dream come true if you are ready for it and it’s a night mare if you go into it unprepared. Getting ready for retirement is not just about saving enough money, it’s also about capital preservation. The following check list will teach you how to save it and how to preserve it.
The 7 Retirement Tips You Must Follow:
#1 – Plan, plan, plan.
The only money that will be there when you get there is what you sent ahead. Plan, invest and start early. You should start planning for your retirement the day you start your first job; unfortunately, most of us do not do that. But it is never too late to start; if you have not opened an IRA or made 401k plan contributions, do it today.
#2 – Don’t Be in Denial.
The market goes up and the market goes down; plan accordingly. Work with your financial advisor on preparing a properly diversified portfolio so if one segment of the market is down, the other is up and you don’t lose your shirt. Work with your financial advisor on preserving your capital.
#3 – Take Off The Rose Colored Glasses.
When you retire, market conditions still do fluctuate; be prepared for that. Open your financial statements, do not leave them stacking up on the desk unopened. Work with your financial advisor, review your investment strategies with the advisor. If the strategies you have in place are not working ask questions, read financial books, take financial classes.
#4 – Be Debt Free.
Pay off your mortgage, do not have any car payments, have your credit cards paid in full. When you retire, your pay checks stop. If you are in debt when those pay checks stop, where will the money to pay for that debt come from. It will be difficult to pay down debt without a paycheck so do not stop working until your debt is zero.
#5 – Never Stop Analyzing.
Review your sources of income before you retire. You will need approximately 80% of your pre-retirement income at retirement. Expenses do not stop when you retire; you still need money for food, clothing, taxes, health insurance, entertainment – – about the only expenses you eliminate at retirement are work clothes and travel expenses.
#6 – Go In With Lots of Savings.
Do not go into retirement until you have enough savings to carry you through. If you are not ready, you are not ready, do not retire until you are ready; unless you plan on working during your retirement years. Many retirees do work in retirement, but if you will be one of those working, know that before you get there.
#7 – Do Not Fall in Love.
Never fall in love with a particular investment. The market is a moving target, never stagnant. Investment models change and you need to either be able to move with the change or get out of that investment.
Retirement can be your reward for a job well done. But if you enter your retirement years unprepared or too early, you may regret it instead of enjoying it. Save enough, have a plan in place to preserve it, watch the markets, but not too closely, never fall in love with an investment.