It's an unusual time for people approaching retirement. While everyone wants to know if they are financially ready to retire, rising inflation and a slumping stock market may be fueling doubts. Some - especially those without a solid financial plan - may wonder if they need to keep working longer until there is more financial and geopolitical stability.
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I've worked with many individuals and couples who needed help to feel financially secure in retirement. Many have taken an initial stab at planning, taking online financial "quizzes" and running numbers through calculators to find answers.
For anyone is this position, here is a list of recommendations to begin the retirement planning process.
Understand Your Financial Position
Start by answering a few questions; the answers will help serve as the foundation of any plan. The questions include:
What assets do you own that can be used to fund retirement?How much do you plan to spend each month in today's dollars?
What kind of lifestyle do you want in retirement?
How long will your finances sustain you?
Do you want to leave money for your children and grandchildren?
With this information, a financial adviser can develop a comprehensive financial plan. To ensure that a person doesn't run out of money in retirement, the plan is built for each person's life expectancy. Life expectancy is often higher than what people might think - according to the Social Security Administration, there's a 30% chance that men will live to age 92 and women to age 94. Families need to ensure that their portfolios can sustain living 20-30 years after retirement.
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