How To Be Prepared For Retirement - How to Make Your Advisors Accountable


Retirement means different things to different people – the opportunity to travel, have time to indulge in a favorite pastime, simply get out of the rat race to uncertainty about what it will involve. Whatever your retirement objective, one thing is certain – you’ll need money in retirement.

How prepared are Americans for retirement? What is the current position?

Much has been written about how unprepared Americans are for retirement and terrifying statistics have been mentioned. While different age groups show different pictures, the common theme is that many people of all age groups are financially unprepared for retirement.  This is particularly important as people live longer and are healthier, which means they’ll need money for twenty years or longer.

What actions should individuals take about their retirement?  

First they should take a realistic look at their situation. However dire it is, doing something about it is better than refusing to face reality.

  • When do you plan to retire? As early as possible; work until 65, or longer if you are able to?  

  • What do you intend doing once you’re not working full time anymore? Downscale but maintain your present lifestyle? Relocate to another state, city or country? Keep busy with some part-time work?

  • How much money will you need? This is THE important question. It’s one you should look at, even get professional assistance to do it. Without knowing what your aim is, it’s difficult to be motivated and stick to your plan.

How to go forward?

It’s never too early to start making provision for retirement, or too late to do something positive about it.  So what do you do if you’re in your forties or fifties, have no adequate saving and investment strategies in place and realize your retirement provision is insufficient?

Do something about it; anything is better than continuing to live with this fear of becoming destitute at some stage. Start by going through the three steps mentioned above and make some firm decisions. As you go forward, it’s important to regularly take stock of your position. Changes in your circumstances, the markets and regulations may mean some adjustments are needed.

Practical ways to handle your retirement savings

Everyone’s road is different, but start early and save regularly. A general rule is that you save 10 – 15% of your earnings, including your employer contributions.  Growth potential is important and the younger you are the more risk you can tolerate (for instance an exposure to the stock market).  

Use what is available to the fullest; your 401(k), as well as other workplace savings plans like IRAs. If needed, supplement these with other retirement plans available, like Fixed Indexed Annuity (FIA). They pay a minimum guaranteed interest rate over the term of the contract, plus additional interest when the market index to which it is linked increase.

It’s important to stick to a plan, and add to these savings whenever you’re able to. Someone in their forties who need to play catch-up may want to look at their lifestyle. Often money spent on things like weekends away, regularly eating out impulse buying can be added to retirement savings. Tough to do now, but you’ll thank yourself one day!

If you’re in the pre-retirement phase and you’re concerned about not having saved sufficiently, try to keep working as long as possible and delay your social security to 70 if it’s feasible.

Someone who is still relative young and healthy may want to look at ways to keep busy and active while earning some extra money once they’re no longer working full time. Once again it’s almost never too early to start preparing. What are your interests, what are you good at that other people will pay you money for? Educate yourself, stay on top of what is happening; the digital economy makes it possible to work from anywhere if you have a skill other people are prepared to pay for - and earn some extra money.

Think about retirement, talk about it, work out a strategy and get advice. As you get rid of the uncertainty and prepare well, retirement can become one of the best times of your life.

Trusted Advisor Staff