3 Steps to Help Make Your Retirement Assets Last

48597849_sRetirement means different things to different people. To some, it could mean having additional time to visit family. To others it might present more opportunities to volunteer in the community. And to some it might even mean having the chance to get a little more golf or tennis in with close friends.

But while some of these things can be very low or even no cost (think hiking or reading in the shade), many of them will still require money.

If you’re getting to the point where the idea of retirement is becoming more of a reality, but you haven’t yet considered its financial impact, here are three steps to take to help ensure that you can make the most of life’s next chapter.

Take stock. All this step requires is that you examine your assets and liabilities. In other words, did you leave a 401(k) at an old job? Have you checked your main stock portfolio lately? Do you have a number of outstanding loans? Do you have too much cash saved in a low-interest savings account, or even worse, a basic checking account?

Once you can get a handle on what you have and where you have it, record everything in a simple spreadsheet. Once you do, you can move on to step two.

Evaluate expenses. The financial world has lots of plans for people to save for retirement, but very few people talk about how to spend during retirement. This fact alone can get the best saver off track very quickly after calling it a career.

For example, if someone said to you that you’d have $1 million in the bank for retirement, you may say, “hey, that’s great!” But in reality, that sum might only equate to about $40,000 to $50,000 per year of income. Would this be enough for you and your spouse for the rest of your lives?

For this step, first, figure out all of your current expenses – and yes, I do mean all of them. Even those “inexpensive” stops to the coffee shop can add up. Again, this can be as simple as making a list and totaling it up.

Next, figure out what expenses you will still have after retirement, those that you may be able to cut, and even those that may come up.

For example, you may still have a car payment, and that won’t change. But what about your mortgage payment? Could that be adjusted if you downsized? Relocating could reduce not only the cost of the mortgage, but also property taxes, utilities, and maybe even travel expenses if you move closer to places you visit frequently.

In terms of what could arise, some people have the dream of wanting to own a beach or mountain home as a vacation spot, or even simply taking more vacations. These costs will add up fast, so be sure to give your best estimate.

And if you think this step doesn’t matter, please reconsider that thought. Just a few years of outpacing your budget at the beginning of retirement could mean trouble later.

Formulate a plan. This is the most involved part of planning for retirement, but with some foresight and possibly the help of a certified financial planner, you can get ahead of the game quicker than you may think.

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