Retirement Roadblocks: Getting Back on Track

Despite your best laid retirement plans, almost everyone reaching the major life milestone of Retirement will encounter one Retirement Roadblock along the way, and most will experience more roadblocks.^[1] It’s not uncommon to have your retirement derailed by unexpected circumstances that may severely change your retirement plans. While no one can control all that life throws at you, how you respond and who you rely on is very important.

Keep calm and call your advisor.

Making any financial decisions impulsively, in a moment of panic, when pressured, or when emotions run high can be surprisingly detrimental to the plan you’ve built for your future. A qualified financial advisor is trained to look at your situation objectively and provide options based on your specific financial needs. If you are working with a financial advisor that is a fiduciary, such as a Certified Financial Planner™, they are required to make recommendations that put your needs first.

Looking for 5 ways to help you get your retirement back on track?^[2]

1. Take advantage of catch-up provisions

If you are 50 or older, you can often contribute more tax-deferred income to a 401k or IRA.

2. See where you can trim expenses to save more

Boosting your savings to get back on track for retirement might be easier than you think. Cutting back on unnecessary spending on things like monthly subscriptions, dining out, clothing and travel can make a big difference over time. Even saving an extra $100 per month can largely impact your retirement savings.  Interested in learning more about budgeting?  Click here to read more about some simple Budgeting Strategies.

3. Evaluate your investment and insurance options

Review where your assets are currently allocated.  Ideally you should be talking with a comprehensive financial planner who understands insurance and investments. If you haven’t taken a look at your full portfolio recently, or if you don’t understand what assets you have, there’s a great possibility that you’re missing out on some opportunities that can help define your retirement plan and income. Schedule an appointment with our Certified Financial Planner™ to get answers to your questions and viable options explained to you.

4. Reevaluate your retirement lifestyle and income

How much income will you really need to live comfortably during retirement? Historically, advisors have recommended that a person’s income during retirement should be at least 70% of their pre-retirement income but 70% may not your number.  

If you net $3,000 a month in pre-retirement income, what expenses will you have and what income will you likely need when you’re in retirement?  70% of $3,000 is $2,100 a month; 85% of $3,000 is $2,550 a month.  If your monthly expenses are above what your retirement income will be, the retirement lifestyle you had envisioned could be at risk.

A qualified financial advisor can help you create an income plan that is realistic and adaptable based on your existing assets and liabilities.  A qualified financial advisor can help you design a retirement income plan designed with your future needs in mind.

5. Work longer 

These days, the average American will live into their upper 80s. With that said, working an extra five years might not be such a sacrifice, yet it can make a large impact on your retirement savings.  When you are wondering if and when you can retire, you’ll want several projections created for you so that you can see how the choices that you make today can affect the income you live on as you age.

A word of caution for those of you who have already started taking Social Security and who plan to return to work.  Your benefit can be affected enormously by returning to the workforce.  Before you make a commitment to a new job, or open a new business, we highly recommend talking with a qualified financial planner who understands the ins and outs of Social Security.

Bottom Line: Retirement planning is not an exact science and there is no one size fits all answer. There are many factors that contribute to your unique plan and often your needs will change over time. No matter where you are on the path to retirement, whether you’ve been derailed or not, it helps to have someone you can talk with about your long-term goals and plans. We’re here for you.