Click Here to see a Video on Retirement
A question we get often during our daily conversations with clients and prospects is “Do I have enough money for retirement?” While it’s quite the “catch all” question, everyone has different priorities and expenses in life that make this question not as clear cut as it may sound.
There are a number of different factors that we take into consideration when a client comes to us and asks this. Below, we wanted to outline some of those that we analyze to see if you are on the right path towards retiring with sufficient funds to support your lifestyle.
- Time Horizon:
One of the first questions we will ask a client is their investment time horizon. How many years do you have until you plan on retiring? This will set up a basis to understand how your planning should play out.
- Assets:
Now, let’s talk about your assets. This includes liquid assets, such as your bank accounts and illiquid assets such as your house. Being able to understand where your sources of income will come from in retirement is imperative.
- Investment Accounts:
Although this falls under the asset category, we wanted to separate it out to put an extra emphasis on this portion of our conversation. What investments do you have that you can use in retirement? Do you have an employer sponsored retirement account? How about an IRA or a non-retirement account? If so, let’s understand how they are set up and estimate how they can help supplement your income in retirement.
- Debts:
Of course, another key factor we have to take into consideration is your long and short term debts. Long term debts, such as a mortgage and short term debts such as a credit card, play a major role in anyone’s financial life. When your salary stops being paid, these expenses may feel like they can add up quicker than they did so we like to see if there are ways we can pay them down or eliminate them completely before you hang up your working boots.
- Goals:
Last but not least, let’s define your goals. What do you want to do in retirement? Do you want to travel, spend time with your family, buy another home? All of these are key factors we need to consider when calculating if you have enough to last for your retirement years.
Having these basic but important questions answered will help us to fully understand your financial picture and goals. These conversations may also lead us to give suggestions on how you can improve your financial picture, if necessary, to potentially help you save more for your retirement years.
Suggestions may include paying down debts, allocating more money into your retirement portfolios or setting up an estate plan if it makes sense for you.
The Final Word:
As you may gather from the above, there is no universal set amount of money that defines if you have enough for retirement. We always encourage building out what your retirement plan might look like and then figure out how you may be able to reach those goals. Everyone’s situation will be different but surrounding yourself with a team of professionals that can help you create and execute a plan to build towards your retirement can go a long way to bring you confidence.
If you would like to check out a video we produced on this topic, feel free to click here: If I Wanted to Retire, I'd Answer These Questions First
Disclaimer:
Rockline Wealth Management (RWM) is a registered investment adviser located in Plainview, NY. RWM is registered with the U.S. Securities and Exchange Commission. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.
Rockline Wealth Management does not offer tax or legal services. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.