Do You Want To Retire in 10 Years?
Here’s A Step-By-Step Guide
Your finances need to be managed well to align with your retirement plans. If you are looking for a step by step guide, here’s a collection of information for you.
STEP 1 – EVALUATE YOUR FINANCIAL SITUATION
The first step in planning your retirement is assessing your current financial standing. Do you have enough savings that you can use when you retire? Do you have a retirement account? It helps a lot if you start listing down all the retirement accounts you have. Whether it’s a TFSA, RRSP, or other retirement accounts, you can include them in the list, except for your emergency funds.
STEP 2 – OUTLINE AND WRITE DOWN YOUR RETIREMENT GOALS
Next, you need to outline and list down your retirement goals as part of the plan. Your goals will help you move forward in the next years to come. Are you planning t move to a smaller residence or a larger one? Do you want to spend the rest of your life traveling? Are you looking to build your own business? Your goals will determine how much financial support you will need. Along with your retirement goals, you might as well want to establish your retirement budget so you can plan how to save as early as now.
STEP 3 – SELECT THE DATE WHEN YOU WANT TO RETIRE
On top of outlining and defining your retirement goals, it’s a wise decision to select the date when you want to retire. There are different factors to consider in this step. First is the exact date you want to retire from your work and second, your age when you retire. Life expectancy is increasing and if you retire early, you may be enjoying several decades more. This means that you will need more financial support to sustain the lifestyle you prefer.
STEP 4 – CHECK IF YOUR INCOME SOURCES CAN SUSTAIN YOUR RETIREMENT YEARS
Now that you have an established retirement budget, it’s time to check your income sources. Are they enough for you to save money in the next 10 years before you retire? That’s a question you need to answer in this step. Saving money regularly can help you sustain your retirement years. Your retirement accounts can also give you a substantial amount of monthly pension during those years. List down all your income sources and the estimated amount you can get from them. Check your savings account, retirement accounts, and other investment portfolios that can be included as your source.
STEP 5 – THINK ABOUT HOW MUCH MORE SAVINGS YOU NEED
Let’s say you have listed down all your income channels. The next step is calculating how much money you have and how much money you need. This is essential so that you will know how much more you need to save in the next years before your retirement date. You need to be exact in your calculations. If not exact, it’s better to exceed than to get short of your money. Remember that the longer your retirement years are, the more money you need to accumulate to support your retired life. Think where you can get financial support in case you can’t reach your target. Or, you can change your goals and match them with the amount of money you have.
STEP 6 – ASK A PROFESSIONAL’S ADVICE
Retirement plans, especially if it involves finances, can be a lot more complicated for a normal person. This is the reason why there are professionals who can assist you. In case you still can’t figure out how to manage and control your finances at this point, you should seek the expertise and guidance of a financial advisor. Good financial advisors help clients review their retirement plans. They also make sure that you are taking only the risk you are willing to take. They help in ensuring that your portfolios are spread out evenly to match your retirement goals.
Also, it helps if you will contact a tax advisor to teach you more on tax strategies. Tax advisors can help you maximize your earnings while reducing the taxes you have to pay in the future.
STEP 7 – PUT IT ALL TOGETHER AND DON’T BE AFRAID TO CHANGE UP YOUR PLAN
These are only the steps. Your progress is not included on the list, which means that you need to track and document your progress so that you will know when and where to adjust. Review what you have made monthly, quarterly, or yearly and determine what else you can improve. In this way, you will be able to achieve your goals with the changes you are about to make.
THE BOTTOM LINE
A lot of people seek the help of financial advisors to plan their retirement and help them with their finances in the next 10 years to come. If you are curious about how you can retire in 10 years, just like these people, follow the steps mentioned above. Even with the little savings you have right now, you can still make a big difference by increasing your savings and retirement contribution. This time, you need to take things seriously.
RETIRING IN 10 YEARS IS A REACHABLE GOAL
To make sure that you are ready to retire on the date you have set, you may want to work with a financial advisor. With the right financial advisor, your needs will be accommodated and it will be easier to plan your golden years.
Keep in mind that Social Security benefits won’t suffice. You need independent savings accounts or retirement accounts to serve as your main pension sources. While you are at it, try our Social Security calculator and retirement calculator. They will tell you the benefit you can expect from the government and if you are on the right track when it comes to saving.