The Middletown Press (Middletown, CT)
Steps to take before your retire
Retiring may sound simple: You just stop working and start playing more golf, right?
You can do it that way, but as with so much in life, taking the time to prepare can pay big dividends. And we’re not talking about your golf score.
If you are just a few years away from retiring, there are a number of positive steps you can take to make the most of your post-working life, both financially and in terms of lifestyle. Just remember, you’ll want to get it right the first time, since you likely won’t get a second chance to “retire right.” Consider taking the following steps to prepare for an enjoyable retirement:
• Outline your vision. Start by writing down your goals for how you want to spend your retirement years. Don’t think about finances at this stage. Try to capture a vision of your post-working years on paper. Be specific. Writing down “Travel” is too vague, but writing “Tour China and Japan” will give you a sharper focus. Do you want to do some type of volunteer activity? Take up a new sport or hobby? Simply spend more time with family? Writing down these goals will help you focus more clearly on your future.
• Run the numbers. You won’t feel secure as a retiree unless you feel confident of your financial standing. Estimate your monthly costs post-retirement, and then run financial scenarios that include your assets, income and spending plans (based on your needs and goals). Take into account potential variations in investment returns, inflation, taxes, health-care costs and your life expectancy. As a financial planner, I help people run these difficult projections.
• Cut expenses. Once you retire, you are likely to face unaccustomed limits on the amount of income you can generate. Start learning now to live within a budget and keep expenses in check. Write down each bill that you pay and estimate how much you spend on eating out and entertaining, then go through these items one by one and think about ways to cut costs. Some easy targets include cable TV bills and phone/ data services.
• Pay off your debt. Debt drags you down, and the drag gets worse after you retire. If you have credit card debt you need to focus on paying that off immediately. Then look at your overall debt picture and decide whether it makes sense to pay off your mortgage or other large obligations. Our clients often have considerable holdings in cash or equivalents, and often we discuss using a portion of those holdings to pay down debt, especially in relation to interest costs and tax implications.
• Do a “dry run.” Over the next few months, pretend you have already retired. By living within a budget and focusing on your retirement goals, you’ll see which aspects of your retirement plan you will need to adjust before it’s time for the real thing.
Eric Tashlein is a Certified Financial Planner professional™ and founding Principal of Connecticut Capital Management Group LLC, 67 Cherry St., C-2, in Milford. He can be reached at 203-877-1520 or through www.connecticutcapital.com. This is for informational purposes only and should not be construed as personalized investment advice or legal/tax advice. Please consult your advisor/ attorney/tax advisor. Registered Representative, Securities offered through Cambridge Investment Research Inc., a Broker/ Dealer, Member FINRA/ SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors Inc., A Registered Investment Advisor. Cambridge Investment Research Inc., and Connecticut Capital Management Group LLC are not affiliated.