You have a million things going on, and retirement planning may be the furthest thing from your mind. But it really shouldn’t be. In order to be well prepared for retirement, you need to start now regardless of where you are in your career.
Here are five financial requirements you should focus on as you prepare for retirement:
- You should have no debt of any kind. No credit cards, no mortgage, no student loans, no cosigned loans with family or friends and no home credit line. You should have an approved homeowner’s line of credit in place for emergencies.
- Your home should be in near perfect condition. The roof, the furnace, the paint, the gutters and such should all be new or near new. If not new, you should have a reserve of money in the event you need to replace them. Any other remodeling you want to do should be done or you should have the cash reserved for the work.
- Buy the car you will drive for 15 years at retirement and pay cash for it. Yeah, it may be an all-wheel drive Subaru, but there is a reason so many retirees drive them.
- Fully fund your retirement account every working year to the maximum allowed. If you have not fully funded every year you have between now and retirement to get after it and get it caught up.
- Project your retirement budget and adjust it to meet your expected retirement income. You should know your monthly retirement and pension benefits in advance to see if they square up with your expected expenses. And be realistic about those expenses so you and your spouse know the plan before you retire. You might have to reconcile your expectations with financial reality, but do it before the reality hits.
At Mondelis our plan sponsors strive to play a role in bridging the retirement knowledge gap. Without the correct guidance, people may not have the tools to make decisions to ensure a quality post-employment lifestyle.
Contact us today to learn more about how to more effectively plan for retirement!