Your golden years should be spent relaxing and doing more activities you enjoy. Before taking a well-deserved break, it’s crucial to have enough savings to support your retired lifestyle. That’s likely why you’re wondering whether you’re on track for retirement.
Your ability to retire comfortably depends on several factors, including (but not limited to) your contributions, average rate of return, and how your expenses change as you get older. Working with a financial advisor can help you assess all these aspects and find out if you’re on the right path. Let’s cover which steps you can take to keep you on track to retire.
1. Assess Your Retirement Goals
To understand if you’re on schedule for retirement, you first need to know what your retirement goals are. What kind of lifestyle do you want to lead in retirement? Many retirees choose to become world travelers, move to a different location, or even downsize and live a more simple life. Deciding what you want retirement to look like can help you determine if you’re on course to meet those needs.
To get a full picture of your retirement planning in relation to those goals, consider your future healthcare needs, family commitments, charitable giving, and other factors that may impact your retirement plans. Once you have a clear idea of your retirement goals, you can work toward creating a realistic retirement plan.
2. Calculate Your Retirement Savings
For a solid retirement plan, you need a clear understanding of your current retirement savings. That includes employer-sponsored plans such as 401(k) or 403(b) accounts, or self-directed accounts like a Roth IRA or investment accounts. Review each account and calculate how much you currently have saved for retirement using a retirement calculator. This could be more complex if you have multiple retirement accounts. Don’t forget to look up retirement accounts from previous employers that you may have forgotten to take with you.
If you haven’t started saving for retirement yet, it’s never too late to start. If you have the available income, you could choose to set automatic contributions to your retirement accounts, which may help you contribute consistently over time.
3. Save As Much As Possible
Taking steps to optimize your savings could change the course of your retirement planning. The earlier you start saving, the more you’ll be able to take advantage of compounding interest on your retirement accounts. A 2022 Charles Schwab survey found that workers believe they’ll need at least $1.7 million to retire comfortably. You’ll need to start saving as much as possible as soon as possible to reach that goal.
Many experts suggest saving at least 15% of your annual income toward retirement. If you’re behind on your retirement savings and over the age of 50, consider making catch-up contributions to your retirement accounts. These can help boost your retirement savings significantly.
4. Work With a Financial Advisor
Working with a financial advisor might be one of the best things you can do to get on track—and stay on track—for retirement. The 2022 NorthWestern Mutual Planning & Progress study found that 77.5% of people who worked with a financial advisor reported more certainty in their ability to plan for retirement.
A financial advisor can help you create a personalized retirement plan based on your goals, current savings, and estimated retirement income. They can also provide guidance on investment strategies that aim to maximize your retirement savings. A financial advisor can also help you navigate complex retirement planning issues such as tax implications, Social Security benefits, and healthcare expenses.
Reach Out to Find Out if You’re On Track
Planning for retirement is a critical step toward financial freedom in your later years. If you’re ready to work with a financial advisor to get your retirement on track (or to feel confident you can stay on track), reach out today to schedule a no-obligation, get-acquainted meeting, or call us at 207-504-3614. Don’t wait until it’s too late; the earlier you start, the better prepared you’ll be to face the future.
Jody James is an LPL financial advisor at James Financial Group, a firm that takes the mystery out of investing, managing risk, and preparing for retirement. With over 10 years of experience in the wealth management industry, Jody works closely with individuals and small business owners to craft creative and customized strategies that allow them to work toward their financial and life goals and preserve their wealth. Serving as a bridge between Wall Street and Main Street, Jody loves the juxtaposition and synergy as he helps clients pursue their dreams while also making an impact on the local community—raising capital for other businesses, entrepreneurs, and innovators.
Jody has a bachelor’s degree in history from Le Moyne College, an MBA from Brandeis University, and holds the Series 7 and Series 66 certifications through LPL Financial. When he’s not working, he enjoys traveling, working out, and spending time with his wife and three children, whom he adores. He’s also a huge New England Patriots fan. To learn more about Jody, connect with him on LinkedIn.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
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