For many people, the dream of a retirement rich with financial comforts has become overshadowed by financial stress and anxiety. People are living longer, making it harder to ensure you don’t run out of money during your retirement. Having the resources needed to live the kind of life you envision during retirement is totally possible. With strategic planning, and a focus on your retirement income, you’ll set yourself up for a less stressful retirement. Worrying about money is one of the greatest stressors, but there are plenty of things you can do now to ensure that your money will be there to support you and your family even after you’re gone.

Smiling middle aged couple outside on a sunny day in warm weather.

Enter Retirement Debt Free

If you want to reduce your anxiety about outliving your retirement savings, it’s important to start reducing and even eliminating as much of your debt as you can immediately. Put a plan in place with the goal of being debt free by a certain time. If it’s possible to accomplish this goal before you retire, that will allow you to save even more. You’re working now, and debt payments aren’t dragging you down. You still have money to buy and do the things you want to do, but learning how to manage your money smarter now will set you up for financial success later.

debt quiz #1

Minimize Your Fixed Expenses

If you want to make your money last longer, it’s crucial that you start minimizing your fixed expenses now. These are the things you can’t go without, such as food, transportation, shelter, and even debt payments and insurance. By ensuring these expenses fall within or under your income now, it will be easier to plan for retirement life later on, including making any necessary adjustments.

Save and Budget

Planning and budgeting are critical to achieving financial success. If you don’t have a handle on where you stand financially, you’re doomed. It’s hard for a lot of people to sit down and face their finances-but you must. In order to plan ahead, you need to know what you make and where it all goes. You could have the potential to save a lot more than you are right now, (most of us do) and you don’t want to look back on these years and wish you would’ve been smarter with your money. If you want to provide a good life for yourself later, you need to start working on it now.

One popular rule is to save 25 times your average annual expenses, but how much money you will need in retirement depends on multiple factors such as your age, where you live, and how much the retirement you picture yourself living will cost you on a monthly basis. Here’s an example: For many of our clients it is important for them to retire around the age of 62. The idea is that they will have more healthy and active years to enjoy in retirement. Retiring at this age requires several things to be incorporated into your planning, and the earlier you can do that, the better. This includes liquidity, leverage, and a buffer asset (to get you from age 62 to age 70 without starting your social security and converting as much of your tax deferred monies to tax-free during that 8 years as possible.)

Questions-ask-retirement

What About Unknowns?

Retirement comes with many unknowns. But ask yourself this question: Are you the same as the majority? Do you plan, save, spend and think like most of the people around you? If you answered ‘no’ to this then you probably need, want, and deserve a retirement strategy that is built around what makes you, well, you. A few major benefits of this type of planning that you will quickly realize is the amount of liquidity you find yourself having in just a few months. More liquidity and access to your money can equal much less stress. You will also find out that if you have a retirement strategy built around being tax-aware, you may be able to save quite a bit less than you currently are and end up with more net income at retirement. Lastly, you will find that you may have much more control over how much of your retirement that you get to keep in the future. 

Plan for what you plan to do, how you want to live, but also leave a little room for uncertainties. We teach our clients to see the difference for yourself. The original 401(k) plan was never intended to be what it has become today. You will likely be shocked at what you are missing out on.

Tax Smart Strategies

Figuring out ways to minimize how much the IRS takes from your retirement money is an essential part of a retirement income strategy. Everyone’s financial situation is unique, and everyone has a vision of how they want to spend those golden years, so there really isn’t a one-size-fits-all plan to act on. Guidance from a trusted financial consultant can help you understand ways to be more tax aware as you approach retirement, and developing a custom tax smart strategy based on your unique status and goals is highly recommended. 

How Does Your Retirement Income Strategy Look?

Whether you are worried about running out of money, or confident that you’re all set, developing retirement income strategies now will ensure that you’re in the best financial position heading into retirement. Developing a sound strategy for and about you will provide you with much more liquidity and stress relief all the way to and into retirement.

You’ve worked hard, and will continue to do so. Don’t let a lack of planning and strategizing be the reason your retirement income leaves much to be desired when you need it most. We help people like you maximize their income now to achieve their financial goals for retirement. Let’s talk about how we can help you plan for a financially successful future. Contact Safe Money Partners today. 

Schedule-your-consultation

Jeff Mohlman

By Jeff Mohlman

Jeffrey has developed a comprehensive network of financial planning and estate planning experts who work for their client’s short-term and long-term goals. Today, the approach he incorporates for his clients follows three basic tenets: 1) being debt-free, 2) maximizing after-tax retirement income, and 3) protecting their estate from unforeseen risks.