Steps to Retiring On Time

Tax season is just around the corner - the proper time to look at your portfolio and ensure your retirement plans are on track.

In a recent survey of Puget Sound, residents, almost 63 percent of pre-retirees (age 45 and older) said they would not or weren't positive they could retire at their preferrred age. In the same survey commissioned by Symetra Financial, Gallagher Benefit Services, Inc., and Senior Services, 42% of pre-retirees stated they have not calculated how much income they will need to last throughout their lifetimes.

"Whereas there are indicators of economic recovery in the region, sticking to a plan, managing personal expenses and saving for retirement must be an ongoing priority, as market situations can change shortly," stated Bridget Burgess, CFP, president of Symetra Investment Services and board chair of the Puget Sound Financial Planning Association. "Retirement is supposed to be loved, not feared resulting from monetary concerns. There are fundamental steps each of us can take to realize a safe retirement."

1. Create a plan. Start by calculating what earnings you'll need in retirement. Experts say that many retirees require not less than 80 % of their pre-retirement income to live comfortably. Estimate primary residing costs and different expenses that may come into play, resembling traveling, a new pastime, increased medical payments and, of course, inflation. Additionally estimate potential income from rental properties, different investments, inheritances, pensions, etc., and incorporate these estimates into your monetary plan.
2. Handle and scale back your bills now, earlier than retirement. To help offset future costs, manage bills earlier than retiring. Among the best ways is to cut down credit-card debt. The typical family's excellent credit score-card debt was $10,679 on the end of 2008.
3. When regular paychecks come to an finish, giant bank card payments can be a actual burden.
4. Diversify your funding portfolio. After you decide how much you want in retirement and you've reduced expenses, develop a financial objective and start investing now. As we've seen in the current economic downturn, investing in securities incurs market risk. The easiest way to help cushion a portfolio towards market volatility is to diversify - to divide your money amongst different types of investments, also referred to as asset allocation. Allocating assets among varied investments and across funding kinds is essential because each funding responds in a different way to economic events and different market conditions. Diversification does not, nevertheless, assure a revenue or stop a loss.

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5. Continually evaluate your investments. Changes in family, well being and job benefits can affect how much earnings you will need for retirement. Profit from the financial plan by reviewing investments regularly. Guarantee they are still applicable to your objectives, timeline and risk tolerance. These life events also set off the need for an insurance review to verify your life insurance coverage is consistent with changing needs.
6. Consider creating an assured earnings stream throughout retirement. Creating a stream of assured income, corresponding to an revenue annuity, can fulfill revenue wants throughout retirement, particularly if you don't have a pension. People are dwelling longer, and the prospect of outliving your lifetime supply of money could be very real. Using a portion of your retirement portfolio for assured earnings will help make sure that your money lasts as long as you do. This assured earnings relies on the claims-paying ability of the underlying insurance company sponsoring the annuity.