Retirement Planning Guide: How to Plan Your Future

Some of us are in sync with our retirement planning goals while others of us need more guidance along the way. Whichever category you fall into, it is always a good idea to take time to reevaluate where you are and where you need to be to plan for etirement.

If you're not sure if you're on track or are unsure where to start, here are some tips to consider along your journey.

Think about How You Want to Plan for Your Future

Planning for your future requires looking at your monthly expenses. You can do this on your own if you're savvy with spreadsheets or you can turn to some online tools to help.

There are apps and online planners that can help you look at your expenses and plan for your retirement. 

If you don't want to handle it on your own, you may want to hire a financial or retirement advisor. They can do the work for you and walk you through the process. As you can imagine, the cost of this type of service can add up. You need to consider whether you want to pay for such a service.

Look at What You Have

Part of planning for your retirement is looking at your assets. You need to see what you have already and what you plan to earn before and during retirement.

Look at your savings amount, savings rate, and how many years you have until you retire. This can start to paint the picture of where you stand.

If you're using an online planner to help, you'll likely have to input other information. This can include:

  • Sources of future retirement income
  • Inflation rates for costs like housing and medical expenses
  • Any big one-time expenses
  • Debts and how you plan on paying them off
  • Retirement accounts and rates of return

Gathering this information can help greatly in the retirement planning process.

Set Goals

Besides looking at the numbers, you also want to set goals for your retirement. At what age do you want to retire? How do you plan on spending your time? Are there things you want to accomplish or places you want to visit? Answering these questions can give you a better snapshot of what your retirement could look like. We all know things can change, but having a general idea can help the process. 

Without having a plan or setting goals, many retirees can feel unfulfilled and lost. This can lead to depression and other problems that can be avoided.

Look at Whether Your Plan is Realistic for your Future

As you start to fill in information about your retirement, look at whether it's realistic. Do your expenses exceed your income? Will you run out of money? Are you where you should be with your savings?

The answers to those questions can give you a better idea of what you can expect in retirement. If things are not looking that rosy, there's still time to improve your situation.

Consider Trade-Offs

If your retirement plan is not where you would like it to be right now, there are some trade-offs to consider to get you to where you want to be. These can include:

  • Delaying retirement
  • Getting a small part-time job
  • Look at ways to reduce your expenses
  • Paying off more debt before retirement

You may need to play around with different scenarios to find the one that gives you the best option to give you a more secure retirement.

Plan for the Unknowns

As you develop your retirement plan, one way to see if it is a good one is to plan for the unknowns. This can help you build confidence in the plan you've created. Think about these scenarios:

Do you have enought income?

Think about whether you'll be able to work as you intend to. This will give you an idea of how much money you'll have coming in.

Is there enough income coming in once you retire?

Social Security payments, annuities, and pensions are all fixed ncome. Look to see if this is enough to cover your expenses without counting on money that may fluctuate.

If your pension is less than your necessary expenses, you'll want to take another look at your finances.

Have an Emergency Fund

It's important to have an emergency fund. You never know when you may need a home repair, a new vehicle, or when another emergency will pop up. Knowing you have enough money to cover emergencies is comforting as you get older.

Look for Ways to Grow Your Investments

If you have investments, be sure money is allocated correctly. Some people can live off the income from their assets while others need to make monthly withdrawals. You want to be sure that your asset allocation can cover your expenses and meet your goals.

Be Sure You Have the Best Housing Option

You want to make sure your housing option is the best for your situation. Here are some things to consider:

  • Look at downsizing
  • Consider relocating to a more affordable area
  • See if moving with family is an option
  • Look at affordable retirement communities

These are just a few housing options to consider as you look at your best housing options.

Keep Your Plan Updated and Be Open to Adjustments

Even after you have a solid plan, you always want to be open to making changes. Situations can change, leaving you with a retirement plan that is not optimal. Being open to having to make changes can make things better.

You want to make sure that your investments have grown the way you anticipated and that your debt is being paid down. Also, check to see that your inflation projections are reasonably on track. All of these things can reaffirm your confidence in your retirement plan. 

Realizing when you may need to change parts of your plan will assure that you maintain a reliable and realistic retirement strategy.

Stifel does not provide legal or tax advice.  You should consult with your legal or tax advisor regarding your particular situation. Asset allocation and diversification do not ensure a profit or help protcect against loss.