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Know how to financially plan for retirement so you can retire on time

Sean Ciemiewicz Principal, CIMC, AIFA, LPL Financial Consultant Retirement Benefits Group

Planning for your future is absolutely critical if you want to retire comfortably and on-time. Many Americans find that they aren’t adequately prepared to leave the workforce because they believe retirement planning is an overly complicated process. While there are many things to consider - from your current expenses, to debt, to where you plan to live once you retire - the most important thing is that you have a plan in place and stick to it. Here is some simple advice to follow when starting to plan for your retirement.


Do be honest and accurate about your expenses

Be honest with yourself and your advisor on your expenses. If you don’t know what they are, keep track of your expenses for three months. Use a small notebook and write down absolutely everything you purchase (whether it’s using cash or a credit card) and all the bills you pay. Even if it is a pack of gum, write it down and then add it all up. You will be amazed at how much money you spend on a daily basis. Be honest with your advisor as they may have some suggestions on how you can save on expenses.

Do use general guidelines for basic planning

There are some general guidelines for basic retirement planning. Factor 70-80% of your final income for your income need. Use a 4% withdrawal rate to maintain principal while generating income. Plus, many more that you should discuss with a financial advisor. You can use these for your basic retirement planning, but make certain you spend the time to have a plan prepared that gets into the nitty-gritty based on you and not an average.

Do have your debt paid off before you retire

Debt is a serious drain on retirement. Prepare early and have all of your debt paid-off before you head into retirement. I mean everything from the cars, to the credit cards, to the house. Yes, the house! You will be amazed at how little you will need on a monthly basis in retirement if you are not trying to generate income for debt. You can also get by with less in assets. Work hard early to get ready for the long retirement and enjoy the freedom of being debt free.

Do plan to retire where you can afford it

I live in San Diego and will awhile before I am in a position to retire. However, I am going to leave California at the first opportunity (and definitely when I am retired). There are many states that are much more affordable to live in during your retirement because they offer lower income taxes and a lower cost of living. Like debt, living in a high cost location can be a huge drain on your retirement assets. It is not an easy or fun retirement when you live in a location you can’t afford.

Do spend time planning for your retirement

A recent study indicated that individuals will spend about six hours of time researching a car they would like to purchase, but they will spend only a half an hour planning for retirement. Carve out some time to really look into your retirement plans. Have a great conversation with your spouse to learn more about their hopes and dreams for the future and how you want to spend retirement. Give it some serious thought and make certain you are reasonable with your dreams.


Do not do mental accounting

Don’t guess how much money you spend every month. Often individuals will use mental accounting to determine their monthly cash flow - meaning, they just guess. Make certain you write it down on a spreadsheet or budget planner. It is the only true way to plan for retirement accurately and effectively.

Do not rely on general guidelines as your end-all

Individuals have been conditioned to believe that they need more than a million dollars in order to retire. Many people ask if they need two or three million to retire these days. This leads to a sense of hopelessness that they will never get there. Don’t get hung up on a set number for the future. Instead, plan around your current lifestyle and situation. Most people will not have more than one million dollars in assets when they retire. It does not mean that they can’t retire comfortably. This is where developing a comprehensive plan and controlling your spending really comes into play. Start to really pin-down your goals and make them realistic.

Do not go on a spending binge after you’ve reached retirement

Once you have retired, you have the freedom to do more because you have the time to do so. Don’t go on a spending binge working on the house or traveling. You now have the potential to build-up a lot of debt again. Do your remodeling and travel as much as possible while you are working and can pay for it. Then, plan basic home maintenance and economical travel when retired.

Do not be hard-headed about moving

Seriously consider living in other locations for your retirement years. Many people say that they will only live in one location, that is until they realize they will not be able to afford it. This does not mean that you need to move 2,000 miles away from friends and family (or to another country). It means that you need to give careful consideration to the general costs of living requirements. When you are retired, driving 300 miles to visit friends and family is easy.

Do not rush the process

If you do a Google search for “retirement calculator”, there are more than 32 million results. Take your time. Start with the retirement planning calculators from your retirement plan at work. Then, continue the process and get more detailed as you go along. If you need help, contact a retirement advisor or planner.

Jumping cartoon

There you have it. By sticking to these simple and straightforward guidelines, you’ll be well on your way to planning for your retirement years successfully.

More expert advice about Retirement Planning

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Photo Credits: saving and retirement by Flickr: 401(K) 2013; Check Man, Cross Man and Jump Man © ioannis kounadeas -

Sean CiemiewiczPrincipal, CIMC, AIFA, LPL Financial Consultant

As one of the Principals of Retirement Benefits Group, Sean Ciemiewicz works with a phenomenal team of professionals dedicated to retirement programs for companies and individuals. Sean’s expertise is working on education and communication progr...

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