If you plan to retire in the next 20 years, you need to start looking at your options and plan to make more informed decisions about your future to meet your long-term goals. The North Bay Business Journal says in "10 basic steps for retirement planning" that a professionally created retirement plan usually includes a review of your estate plan and portfolio investments, tax planning, education funding strategies, insurance and risk management, and retirement and senior issues. Work with a qualified estate planning attorney to ensure that you are doing all you can to effectively build and protect your wealth.
- Emergency Fund. Build an emergency reserve of three to six months of living expenses to decrease stress and prevent the need for loans from retirement plans in the event of job loss or other emergency.
- Retirement Contributions. Max out your contributions to your 401(k)—or at least enough to receive a full employer match. If you're self-employed, look at a SEP IRA or Solo 401k that allow you to contribute more than a traditional IRA.
- Estate Planning. At the very least, you need basic estate planning documents in place: a will, powers of attorney, healthcare proxy, and perhaps a trust. Make sure you review them every few years.
- Tax Planning. Spending extra dollars using an experienced, proactive professional can save you thousands in taxes. This is not the place to skimp.
- Investments. Make sure you have a diversified investment portfolio across all of your accounts.
- Risk Management. Coordinate your insurance with any that your employer offers. Ensure that your home is well-covered. Life insurance should also be examined to provide for loved ones in case of your death. Long-term care insurance should be considered.
- Education. Don't pass on your own retirement to put your children through college. They can get student loans, and you can help them once they graduate. You can't take out loans for your retirement.
- Major Purchases. Think about large purchases you may want to make in the future and how you'll save and pay for them.
- Debt. Have a plan to pay off debts before retirement.
- Financial Review. Remember to periodically review your financial or estate plans because= situations and laws change.
We are living longer, and planning for a long retirement is critical.
Reference: North Bay Business Journal (May 16, 2016) "10 basic steps for retirement planning"