Nobody wants to lose any sleep over something that should be fun and exciting. Retirement is a time of life when you should enjoy what you are doing, and live life to the fullest. I read this on another site and modified it with my own opinions.
For those of you sweating all the “what ifs” it’s important you know that you don’t have to worry about putting your entire nest egg out there at risk to make it happen. Here are five of the last-minute steps that people planning on retiring soon should take prior to buying luxurious items and living life at the country club.
1. Adjust Your Asset Allocation
It doesn’t matter if retirement is in the near term or still a few years away, you need to keep an eyeball on your portfolio and ensure you are making all the right moves. You need a good, diversified mix of investments to ensure successful retirement. Keep in your mind that this may need to last 20, even 30 years. So, it’s important you have a good mix of conservative and more aggressive investments.
One trait that retirees make is being too conservative with their money. Sure, it’s good to be safe and know you have money in your portfolio that will be there when you need it. But what about 10, 15 year goals? Are you going to make them happen if your money is not growing as it should be? Will you miss out on that next big investment idea?
According to T. Rowe, a retiree should aim for a mix of 55% equities and 45% bonds. Your risk tolerance may be different, but use that as a baseline.
2. Plan when you need cash
Before you retire, look at what you need to pull out of each account, and more importantly, WHEN. This may be hard to do, but seek help from a financial planner
3. Figure out Your Ideal Lifestyle
You can make cash last much longer if you take one approach: chill out on an over-consuming lifestyle of the rich and famous! Downsize wherever possible, and take a long, hard look at purchases over $500.
Of course there are many other things you can do to save more money for retirement, but if you follow those three simple guidelines, you’ll be set up for the long term and be safe, sound, and more importantly, financially sound. Retirement can take a good amount of planning, but it’s a marathon, not a sprint. You didn’t sprint to get there, did you? Well, maybe some of you did. If you are 50 or under and reading this, that means you. If you are about 50 – 65, then you are right there. You’ve earned this. Plan it right. Make it the best time of your life, and enjoy the heck out of it. You can thank me later.