10 Steps for Retirement in 10 Years

10 Steps for Retirement in 10 Years

“I am 10 years away from retiring. What should I be doing at this point in my life?”

This is very common question and a timely one being 10 years away.  Incidentally, this makes sense even if you are 20 years away. Here are my 10 steps for retirement in 10 years!

(1)     Develop a spending plan

Where are you spending money? Most people don’t have an accurate idea of where their money is going. It is critical that you have an accurate idea of your spend rate or monthly spending. Starting this process 10 years out does good things for you. First, it gives you an accurate idea as to what that spending number is at retirement.  Second, it gives you 10 years to develop a habit. I can’t stress enough that at any stage pre-retirement whether you are 20 or 60 this is one of the most important processes you can go through. Email me if you want a copy of our spending plan where we track using an excel spreadsheet.  bob@prudentmoney.com

(2)     Consolidate investments into one big plan – strategy wise and account wise

Oftentimes people have investment accounts spread out over numerous places.  For the purpose of retirement, get all of those consolidated into one place where that money is being managed by a strategy of growth and protection from risk. If you can’t move a 401 K plan, just make sure it is following the same strategy for risk as your other investments.

(3)     Set up a benchmarking system to track progress

Start with the end in mind  and determine your monthly income need at retirement.  That income need will require a certain amount of investments earning a certain growth rate to fund a retirement income stream.  A benchmarking sets the benchmark for the end of the y ear telling you where your investment totals need to be at the end of each year.  This tells you whether you are on track or behind the 8 ball.

For example, if you need to be a $500,000 in retirement assets by the end of 2017 to be  on target, then $500,000 is your benchmark.  If you are over $500,000 by the end of 2017 then you are ahead of schedule.  If you are less than your  $500,000 benchmark you are behind.

(4)     Eliminate debt

Without question, you want to be out of any consumer debt. 10 years should give you plenty of time.

(5)     Eliminate Mortgage

I separated this out because sometimes people don’t consider this debt. It is very important that you have a 10-year game plan to eliminate this debt as well.

(6)     Create A Healthy Cash Account 

Cash is an invaluable asset in retirement because emergencies and unexpected expenses don’t go away just because you are retired. The difference is that you had more resources to handle the unexpected when you were working.

(7)     Create your Estate plan

It is also a good time to get a will or a will/trust and all the invaluable documents set up. You want to make sure that your family is taken care of in the event you don’t make it through those 10 years.  Consequently, once you hit retirement, you want to make sure not only that your spouse is taken care of, you also want to make sure your estate transfers to your family when you both are gone.

(8)     Long-term care planning

Ok, don’t ignore this one. Don’t pretend it won’t happen. What is your game plan if you or your spouse have to go to a nursing home or need home health care?  This is a good time to figure out how much long-term care insurance you need.

(9)     Evaluate Life insurance – you might not need it

There comes a point when you don’t need that term life insurance policy that you have been paying for all those years.  At some point, you become self-insured.  Said another way, there comes a point where you have accumulated enough assets that your spouse will be fine without the insurance.

(10)   Start working on your Life Game Plan

Getting the finances in order is essential. At the same time, knowing what retirement looks like is important. You need to be prepared for quite a dramatic shift/change.  What are you going to do with your time? Are you going to volunteer? Give back to ministry efforts? What is most important to you?  Keep in mind that you will have the ultimate freedom to serve and give back. It creates great significance. It pays to be emotionally ready for retirement.


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