Do I Have Enough Money to Retire?
It’s never too early to think about retirement planning. Even if you’re relatively young and plan on working for many years, knowing how you’ll finance your retirement offers peace of mind. It also allows you to address any shortfalls now, which is especially important if your savings and assets are lacking. In Macomb, Michigan, Firma Financial Planning use their considerable knowledge of financial management to help their clients make the best decisions about the future. These retirement planning specialists will look at your unique financial situation and tailor advice to your specific needs.
Which is a good thing, since retirement looks a little bit different for everyone. Some people have dreams of traveling the world while others are content to spend time at home with the ones they love. Others still look for methods of generating income while retired, which serves as a safety net when combined with assets, pensions, and retirement accounts. No matter which option is right for you, it’s important to enter into retirement with a clear picture of how to meet your financial needs.
Take a Thorough Financial Accounting
The first step is to see where you currently stand from a financial perspective. Barring expensive vacations and other luxury purchases, your retirement lifestyle probably won’t look too much different from your lifestyle today. For instance, you’ll need money for essential expenses such as food, housing, clothing, utilities, and other recurring expenses. You’ll also need money for health care, and these costs shouldn’t be taken lightly when planning for retirement. According to Forbes, the average yearly spending on health care costs from age 70 until the time of death is $122,000. This doesn’t including long-term care costs or other medical expenses, which are not usually covered by Medicare.
Once you’ve calculated how much money you’ll need during retirement, the next step is to determine your earnings after you retire. Along with Social Security income, you might be privy to a pension, which is provided by your work. You may also be saving up for retirement, with the plan to draw from your savings to supplement your income. Other retirees look to investments, such as real estate. For example, renting out a property you own delivers a passive income, which can add up depending on how many rental properties you have in your name. Of course, some people look to retirement accounts to ensure they have enough money to live comfortably. This includes 401(k)s, which are provided by your employer. You may also have an IRA account, which is an individual account set up by you. IRAs have certain tax benefits, but you must abide by rules governing withdrawals and age limits.
Identify Problem Areas
Of course, not everyone is ready for retirement. You can determine your readiness by looking at a few factors, such as your current debt amount. The closer you get to retirement the less debt you should have. If you’re still paying down massive debt a few years out, you may need to increase the age that you wish to retire. You may also look for other ways to generate income during retirement to ensure you have the money you need to live comfortably. This is especially true if your savings are lacking, which is often the case when a person is busy paying down debt.
Also, keep in mind that Social Security income probably won’t meet your financial needs. That’s why it’s best to have a diverse income portfolio. Even if you have a pension or 401(k) to rely on, you should still consider investing in an IRA. It’s best to have a good selection of fixed and variable assets to ensure you can capably meet your future financial needs without incurring too much risk.
Financial Guidance You Can Trust
When it comes to financial planning services, Firma Financial Planning has much to offer its clients. Along with retirement planning, they also help with wealth and risk management. They can even assist you with estate planning to make certain your family is cared for after you’re gone. Call (586) 800-4682 today to learn more about securing retirement planners in Macomb County. You can also use their online contact form to get answers to your financial questions.