It is hard to believe how quickly the years have passed, but retirement is looming on the horizon and it’s time to get serious about your plans. A few things to consider as you prepare for this stage of life are:
- Evaluate where you are financially. Financial planners would call this doing a financial inventory. On a single sheet of paper list all of your assets. This would include your 401(k), 403(b), IRAs, investments, savings accounts, home, etc. Include the type of asset, the current value and the location of that asset. By putting all of this information on one page you can easily see what you have and where it is.
- Project when you want to retire. There is nothing magic about retiring at age 62, 65 or even your full retirement age for Social Security. People are living longer and many people continue to work well past what some would consider normal retirement age. But your retirement date affects your financial needs in retirement.
- See if you are on target to meet your financial needs in retirement. Most financial planners say the average family in retirement needs to have the resources to replace between 70 and 90% of their pre-retirement income. The exact amount needed will vary by family depending upon your unique situation. Retirees who have large fixed payments, such as a mortgage, may need to have more money available in retirement.
- Maximize your retirement contributions. Several years ago, Congress greatly increased the amount that can go into retirement accounts. In 2009 an employee age 50 or over can contribute up to $22,000 a year into his 403(b) or 401(k) retirement account. In addition, those 50 or older may be able to put up to $6,000 into an IRA. If you were not able to contribute to your retirement accounts in your early years, you may want to take advantage of these higher limits to help you catch up.
- Evaluate your asset allocation. Asset allocation is basically how you have your money invested. Most people want to reduce their risk and volatility as they move closer to their retirement date. Make sure you have an appropriate mix of stocks, bonds and cash to meet your needs throughout your retirement years. Make changes if needed.
GuideStone offers several
worksheets and presentation modules on its Web site that may help you as you chart the course toward retirement. Planning will make the difference as you prepare for the next thing God has in store for you!