There are some steps that anyone can take that will help ensure that they will have an extremely successful retirement. So what are these steps that you need to take? We will examine what these steps are and discuss them in some detail. The sooner someone takes action on these steps the better the chances that they will have a more successful and thereby better retirement.
First, you need to set your goals and then put them in writing. You would be surprised the number of people who enter retirement or any phase of their life without a written plan. So ask yourself what are your goals? Then put them down in writing to make them real and actionable. This could be saving for a purchase or plans to visit a place you have never been before. Do not limit your goals to just long-term goals as many short-term goals need the backing of being written down as well. When you write a goal down it makes it easier to achieve by giving it importance. And do not forget to place a timeframe on your goals to add an additional level of credence to the goal.
The second is an item that is a problem to many people, regardless of age, and that is procrastination. When you are thinking about your retirement think of the famous term, “time is money.” And that is especially true when it comes to your retirement and proper planning for that phase of your life. It is good practice to avoid rash decisions but at times, indecision is perhaps more detrimental to your retirement. The best thing to do is to understand what your situation is and take the best possible action to achieve your goals. So by getting the facts of your situation, you are placing yourself in a better position to make the hard decision. If you still cannot make that crucial decision, then seek the advice of a fee-only financial planner to assist you in making that difficult decision.
The third step is one that is advisable to most people at any stage of their investing lives or their planning for retirement, and that is to diversify. Never put all of your investments in the same investment vehicle such as investing all your money in equities. It is always a good idea to have a mixture of equities, bonds, cash and possibly other asset classes such as commodities or real estate. If you are younger, then you can afford to invest more in equities as compared to someone who is about to enter their retirement years. There are many on-line tests you can take to see what your risk tolerance is to assist you in finding the proper asset mixture to achieve a diversified portfolio. But this is really where a fee-only financial planner can come in handy by providing you suggestions on how to achieve the proper asset mixture to maximize your potential returns while minimizing your overall risks.
Forth it is important to know the difference between good and bad debt. And yes some debt is better than other forms. If you are younger or in the middle of your working life debt in the form of a mortgage is not necessarily a bad form of debt. Interest paid on a mortgage is tax-deductible, so there is one advantage to having a mortgage. Credit card debt is bad as the interest rates the credit card companies charge extremely high, and that interest is not tax deductible.
Fifth is understanding life’s risks and being properly prepared. This is where proper planning can be beneficial to your financial success. Life is full of surprises and some you can prepare for while other you cannot. The best thing to do is to be properly prepared for such events. That is why it is so important to have life insurance to protect your family in the event of your death provided your family relies on you for financial means. This is also why people insure their automobiles because we do not want to have to pay for someone else’s mistake when it involves your automobile. Life insurance protects you against what can be extremely large medical bills. I hope you are seeing the pattern here that insurance in its many forms protects us against some planned and other unplanned life events. If you need help understanding your risks seek out a fee-only financial planner to assist you in covering all your needs.
Six is always to make sure you have the proper planning documents in place for you and your estate. Wills are a simple way to ensure your wishes are carried out in the event of your death. The use of beneficiary designations can alleviate the need for un-needed probate of certain assets. And in the event, you become incapacitated it is a good idea to have a power of attorney in place for medical as well as financial matters in the event you are not able to make decisions for yourself. If you need assistance in this area, seek out an estate planning attorney.
And finally, it is always a good idea to know when it is you need help and where you can find it. A lot of people think financial planners are only for the wealthy, but anyone can use a good fee-only financial planner for their unique needs. The key here is to find an honest and ethical financial planner. Ideally, you would want a Certified Financial Planner or find a financial planner by using the National Association of Personal Financial Advisors (NAPFA).
If you need more information or need any additional help, feel free to contact me directly or leave a message on this post.
