Are You Still on Track? How to Revisit Your Long-Term Retirement Goals
Retirement Plans Should Evolve with You
Most people have good intentions in creating an initial retirement plan, but they fail to revisit their blueprint. It is no secret that life does not stand still. Priorities, markets, and personal circumstances change. It is our job to guide you through these changes, and to help make sure that your financial plan stays aligned with your long-term retirement objectives.
1. Start with your “why?”
Retirement planning is more than just the numbers. A helpful starting point when revisiting your initial long-term goals is to define what retirement means to you now. Ask yourself some important questions about how you envision your future. What type of lifestyle do you imagine for yourself? Do you want to spend your retired years traveling the world and checking items off your bucket list, or do you want to settle down and take some well-deserved relaxation time? Do you want to work part-time, or explore passion projects that you have always been putting off? What type of philanthropy or legacy goals have you set for yourself?
These goals and priorities might look different today than they will in five years. Because of constantly shifting priorities, it is important to regularly revisit your long-term retirement aims with your financial advisor.
2. How has your timeline changed?
A key element of retirement planning is the timeline. While many people have a target retirement date, it need not be set in stone. Compensation, your perspective on work, financial readiness, and lifestyle can change, and your plan should adapt accordingly.
For some people, the answer could be to delay retirement a few years. This decision might result from financial readiness, access to employee benefits, or simply because they love what they do. For others, the goal might be to retire sooner than expected. This could be a response to priorities changing in order to pursue other interests, spend more time with family, or travel.
If your timeline shifts, even slightly, it can create a significant ripple effect across your financial plan. Retiring earlier may require a higher savings rate now, or a reassessment of future spending. A longer retirement means your portfolio will need to support more years of income, which can influence how and when you begin taking withdrawals. On the other hand, working longer can help contribute to and grow your pool of assets. Social Security timing is likely to be affected by a shift in your expected retirement timeline. Your Social Security claim strategy is closely tied to your retirement date. Shifting your retirement timeline might well change when it makes sense to begin claiming benefits – and how that decision will fit into your overall income plan.
3. Revaluate Your Expected Expenses
Retirement spending is not always static; there can be unexpected expenses that were not anticipated in your initial plan. As many are aware, today’s costs might not reflect tomorrow’s reality. Considering the effects of inflation on your projected future outlays is very important.
When assessing your projected spending be sure to consider your day-to-day living expenses, healthcare costs, travel or lifestyle upgrades, and support to family members.
4. Are you saving enough?
Figuring out what expected and unexpected expenses you might encounter in retirement directly influences how much you need to be saving. A good way to start analyzing your savings is to evaluate your current savings habits. Are your contributions consistent? Have income changes influenced your ability to save? Savings strategies, just like the other line-items we have discussed so far, are not static. They might need to be adjusted over time. Your financial advisor can serve as a guide when changes arise in your life and is here to help you make the necessary adjustments to your strategies to make sure your goals are met.
5. Why Regular Reviews Matter
As we have emphasized throughout this article, retirement planning is an ongoing process. Having an initial retirement plan is a great starting point, but allowing this plan to evolve with you as life goes on is the key to financial success. Meeting with your advisor for an annual review – or even more frequently as major life events arise – allows you to be proactive in making necessary adjustments to your plan.
Over the years, your financial goals can change, and your financial plan should reflect that. If you haven’t revisited your retirement strategy recently, we’re here to help you evaluate where you stand today and make thoughtful adjustments to keep you aligned with your long-term goals.
The material has been gathered from sources believed to be reliable, however West Michigan Advisors cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through West Michigan Advisors. Advisory services are only offered where West Michigan Advisors and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place. Securities offered through Registered Representatives of Level Four, a registered broker dealer and Member of FINRA/SIPC