Retirement Planning Considerations
Know your tolerance for risk
If you have a long time horizon until retirement, assets that have the potential for significant growth over the long term should be considered. However, it is important that your investment choices be consistent with the level of risk that you are willing to assume. In addition, good financial planning must always take inflation into account. If you disregard inflation, you may end up investing too conservatively. Together we can determine a suitable mix of investments that meets your objectives, time frame and risk tolerance.
Increase your savings rate
Saving more for retirement is difficult because it requires spending less money now. However, you will have a much better chance of reaching your retirement goals if you contain or reduce) your current standard of living and save as much as you can. Many planners recommend saving at least 10% to 15% of your gross earnings before tax, to saving for retirement.
Reduce Spending during retirement
While many retirement professionals estimate that you need between 70% and 80% of your pre-retirement income to maintain your standard of living during retirement, we don’t see it that way. Planning should have the goal of maintaining or bettering your standard of living in retirement.
Retiring later has several benefits. First, you have contributed to your retirement plan for more years, and typically, your earnings are higher at the end of your career. Second, retiring later means retirement plan contributions continue longer, and are based on higher income amounts. Retiring later gives a much better chance of not running out of money, and insuring a better quality of life during retirement.
Maximize Contributions to Qualified Retirement Plans
Most retirement plans have are deducted from current taxable income, thus saving taxes, and, the account grows tax deferred.