When people think of retirement they often think of two things: investing and free time. And while it’s assumed that the biggest challenge facing your future retirement is saving for it, there could be other issues as well. After all, you’ve built an identity around your work often for 30 years or more and you’ve gotten used to having a regular income. Eventually you’ll need to rely on the income you’ve planned for retirement – so it’s important to plan well.
The Number One Question People Ask
What’s my number?
That’s one of the questions we’re asked the most when it comes to retirement planning: How much do I need to save to retire? However, the answer is different for everyone and depends on things like…
- Legacy goals
…just to name a few. Many of us have witnessed situations where people have been forced into retirement without sufficient planning and savings in place which creates a drastic change in lifestyle. These scenarios are usually a result of poor short-term planning and a lack of focus on long-term goals.
So, How Can You Avoid These Mistakes?
At Denver Private Wealth Management, it’s our job to help our clients envision what they want out of their retirement and help them determine what their “number” is. Here are a few things we consider.
Save early, save often.
Let compound interest do its job for your retirement savings. At the very least, you should be saving enough to take advantage of your company’s match. At the most, you should be maximizing your tax savings within retirement plan vehicles in order to maximize each dollar saved.
Know how you’re invested.
It would shock you how many people don’t really know how their investments are positioned. This could involve their investments being way too risky, or not risky enough based off their age and risk tolerance.
Have a strong understanding of your expenses.
It doesn’t need to be down to the penny, but by knowing your outflows it can help create a more detailed plan of what you need to save in order to cover your expenses in retirement.
Know what your social security benefit is and how it fits into your retirement picture.
While social security won’t cover all of your expenses, it’s meant to cover roughly one-third of your expenses. Knowing how much you’re due and at what age is important.
Know whether your retirement savings is Roth money or pre-tax.
There are advantages to both depending on your unique situation. Too much of either means you could be leaving beneficial financial strategies on the table that could help you maximize retirement.
Plan Early and Plan Well
Retirement is a huge chapter in people’s lives and should be one that you (hopefully) enjoy. As you get closer to retirement and start wondering if you are positioned for success in your golden years, it’s helpful to speak with an expert. Having an outside resource might help you frame what’s most important and offer some insight that you may not have thought of before.
Outside of retirement something else to consider is leaving a legacy, whether that means leaving money to your kids, a charity, or something else. The sense of accomplishment and closure that can come from defining your legacy and having your life’s wealth fund that gift can be extremely gratifying.
The bottom line is that while retirement might feel like the “end of the line,” you still have another 20-30 years when you’ll need your money working for you. CLICK HERE to make an appointment and we’ll discuss your options.
Denver Private Wealth Management is an independent fee-based financial planning practice with 50+ years of experience in the financial industry. DWPM customizes portfolios based on your financial goals and works closely with you, your tax advisors and estate attorneys to form a comprehensive view of your financial situation. For more information or to set up a free consultation, contact us at firstname.lastname@example.org.
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