Do you have a bucket list? A bucket list includes all the things you want to do before you “kick the bucket.” Many retirees have a bucket list that includes things like traveling to new destinations, pursuing a favorite hobby or spending time with family and friends.
Of course, the only way to check off every item on your bucket list is to have a strong financial foundation and sufficient retirement income. That’s why you may want to create a financial bucket list that includes all the retirement planning milestones you need to reach before you stop working.
Your financial bucket list should align with your unique needs and goals. Some items, however, are nearly universal for a comfortable and financially stable retirement. Three such items are listed below. If you’re preparing for retirement, you may want to develop a plan to hit these milestones.
Build an emergency fund.
An emergency fund is always important. Life can change quickly. You never know when a costly emergency, like a medical issue or a home repair, will arise. Conventional wisdom is that it’s helpful to have enough savings to fund at least a few months’ worth of living expenses.
Emergency funds take on even more importance in retirement. You won’t be able to count on a regular paycheck. An emergency could force you to dip into your retirement assets, limiting your ability to cover living expenses in the future.
Additionally, you may face greater risk of medical issues as you get older. It’s only natural that your health may decline as you age. Medicare won’t cover all your medical expenses, so it’s helpful to have a significant reserve fund to help pay for these costs.
Pay off your debt.
Debt is a fact of life for many Americans. Debt can even be a helpful financial tool, especially when used to fund a home purchase or possibly an education. In retirement, however, outstanding debt can be a drain on your income and assets. Every dollar used to service debt is a dollar that can’t be used to fund your lifestyle.
If you have outstanding debt, now may be the time to get serious about paying it off before you retire. Develop and implement a plan to pay it down. You may want to consider consolidating debt into vehicles with lower interest rates, or possibly even renegotiating the rate and payment terms with your creditors.
Maximize your guaranteed* income.
One of the biggest challenges in retirement is making sure your income and your assets last as long as you need them. You can’t predict how long you will live, so it can be difficult to know how much money you can afford to withdraw from your savings each year. If you take out too much early in retirement, you may not have enough left to fund your later years.
You can minimize this risk by maximizing your guaranteed income. You’ll likely have guaranteed lifetime income from Social Security. You may also have a pension. Consider other vehicles that allow you to convert a portion of your savings into a guaranteed lifetime income stream. For example, annuities offer multiple strategies to generate income that you can’t outlive.
Ready to check these items and more off your financial bucket list? Let’s talk about it. Contact us today at Spicer Wealth. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
17106 – 2017/10/30