What’s Impacting Your Retirement Plans in 2019?
Uncertain times are the right time to revisit your plan.
Thinking about retiring soon? Good for you. However, before you decide to finally cut the cord from your career, take inventory that all factors you need for a comfortable retirement are still lining up as planned. Recent market volatility, fluctuating interest rates, changes in social security and to 401k contributions can impact your retirement picture. If you haven’t looked closely at your retirement plan in light of these ramifications, now’s the time to do so.
7 questions to ask yourself as you revisit your retirement plan.
1. Do you know your current net worth?
It may have changed significantly since you last checked. What do you own? What do you owe? When was the last time you made a full listing of your liquid and non-liquid assets? Same for your liabilities. Calculating your net worth is critical not only for knowing what you have currently, but also to plan for future living expenses, tax payments on retirement account withdrawals, investment allocations, etc. –– all part of retirement planning.
2. Do you know how much money you will need monthly to live the retirement lifestyle you desire?
This too may have changed from what you once envisioned. Traditional formulas based on a percentage of your highest year’s income may not work anymore. For one thing, people are living a longer, so your income stream may need to last over a longer period of time. Also, today’s retirees are more active than past generations. Many retirees have very busy lives –- traveling, taking up hobbies, going to classes, eating out frequently, renovating or redecorating their home –– all of which cost money. Make a list of all the things you see yourself doing in retirement and assign real numbers to each. Even if you never get around to doing all of them, you’ll have peace of mind in knowing that you’ve budgeted for them.
3. Do you have an emergency fund?
The unexpected can occur. Be prepared by having a separate savings for emergencies only. The amount to have in your fund will vary by your lifestyle, family and other responsibilities, insurance coverage, etc. Whatever your case might be, set up an emergency fund and set it aside.
4. Have you minimized your debt?
Try not to enter retirement while still carrying any significant debt. Talk to your financial advisor about what amount of debt, if any, is suitable for your situation and what could be a worrisome burden, especially during market downturns or when confronted with other unforeseen circumstances. It’s easy to get lulled into thinking that you can always go back to work if you need some extra money. While that may be true for some people, health issues and other situations can alter such plans for others.
5. What are your plans for long-term care?
One of the least fun things to think about, this is also one of the most important. Who will take care of you when you no longer can care for yourself? Do you want to stay in your home or move to a care facility? Is your family aware of your desires? Do you have family nearby, or will you need to rely entirely on non-family caregivers? Above all else, do you know the cost of long-term care and your options for long-term-care insurance coverage? Talk to experts sooner rather than later, and make decisions while you have control over them and, if possible, before you retire.
6. Are you aware of changes coming to Social Security in 2019, increases in contribution limits to 401(k), etc.?
The government is rolling out some important changes in 2019. Ask your financial advisor how they will impact your personal retirement strategy and timing.
7. What changes have occurred in your personal life that might impact your retirement plans?
Divorce, remarriage, loss of a spouse, the addition of grandchildren and your help in funding their education through 529 Plans or other investment vehicles, the sale or purchase of a home, assisting family members in need of financial help, etc.–– all of these can have ramifications on your retirement nest egg. It is important to share such issues with your financial advisor.
Bottom line, whether you’re hoping to retire this year or in the next few years, take the time to closely revisit your retirement plan to make sure it still works for you, your family, your dreams, and your peace of mind.
At Lenox, we work with families to help guide them in every aspect of their financial life –– from education funding, to generational planning and finances, to setting financial priorities, to eliminating debt, establishing budgets, career planning and coaching, retirement planning, and working through financial hurdles –– the entire realm of wealth creation, wealth building, and wealth management. In every instance, we start with you, not your portfolio to help you FUND A LIFE YOU LOVE™.
If you’re ready to discuss financial, business, career and life planning that will allow you to Fund a Life You Love®, we’d love to tell you more. Let’s talk. It’s your tomorrow. Call us for a complimentary 1-hour review. Call 513.618.7080 or visit www.lenoxwealth.com to Fund a Life You Love.
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This blog is limited to the dissemination of general information pertaining to its investment advisory/management services. This is not intended to be personalized investment advice. Please contact a Lenox adviser if you would like additional information.