Monday, March 11, 2019
Everyone's personal level of comfort during their retirement may be different. When it comes to saving an adequate amount, you need to focus on what you want. Here are 10 "commandments" to get to a sufficiently comfortable retirement.
- Acknowledge if your preretirement lifestyle is easy to maintain or not, because if you are not ready, it could take a sharp decline.
- Remember that Social Security is designed to replace no more than 40% of preretirement income - thus, do not depend on it more than it was meant to be.
- Create a financial and estate plan for your dependent loved ones that are likely to outlive you.
- Think about the nonfinancial aspects of retirement, such as hobbies, relocation, and those fun vacations you constantly put off. They all take money!
- Pay attention to communications and deadlines from your employer, Social Security, Medicare, personal advisers and others, as what you do not know can definitely hurt you.
- Put retirement goals FIRST, in front of other short or semi-long term goals.
- Save as much as possible as soon as possible now because you can always reduce your savings rate later.
- Be ahead of the game with taxes - invest in Roth accounts and municipal bond mutual funds.
- Health care should be a primary focus for retirement savings, even if you are fortunate enough to not have any expenditures beyond prescriptions.
- Invest in ways that will provide a steady income stream in retirement, as a stable flow will relieve excess stress in your twilight years.
See Richard Quinn, Opinion: The 10 Commandments of Retirement, Market Watch, March 9, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.