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Retirement Planning - Step By Step

Posted on Wednesday, May 31, 2017 in Financial Management & Trust Services

Putting together a sound retirement plan is important in order to reach your goal of retiring comfortably. To most people retiring comfortably means maintaining a lifestyle throughout retirement similar to the lifestyle you have been accustomed to living prior to retirement. While most people realize they need to plan for retirement, many people are not sure where to start.

At First Point Wealth Management, we have a disciplined approach to helping people put together a sound retirement plan. We can help you explore and discern your goals since we have this conversation with our clients on a daily basis.

The first step in planning for a sound retirement is to examine your personal goals and determine the amount of income you think you will need in retirement and the target date. Examining your current living expenses and making your best effort to predict your income needs during retirement is important to setting your income goal.

The second step is to gather several pieces of information pertinent to your retirement plan, and making assumptions that you will use in analyzing your retirement projections. These assumptions include:

  • Inflation percentage to apply to your retirement income goal
  • Identifying your various income sources
  • Investment returns you may experience for your portfolio
  • Additional savings amounts you anticipate putting into your retirement accounts like 401(k), 403(b), IRA, or your non-qualified investment accounts
  • Estimating your life expectancy

These assumptions are your best educated predictions. Obviously, it is impossible to accurately predict all of these assumptions. Retirement planning is certainly not perfect; however, taking the time to make reasonable assumptions and putting a formal written plan together is much better than ignoring the planning process and just hoping for the best.

The third step is to gather all of your statements of investment assets that you will use to supplement your retirement income, and place that information and along with all of the other pertinent data into a reliable retirement planning software system.

The fourth step is to carefully analyze the retirement projections and spreadsheets provided by the retirement planning software based on the facts you have gathered and the assumptions you have made.

The fifth step is to create an action plan of alternative solutions to help you most efficiently reach your retirement goals and then decide which solution(s) to implement. You may need to make some adjustments to your goals, investment asset allocation, or explore other alternatives to increase your likelihood of reaching your retirement planning goals.

The sixth step is to review and revise your retirement plan on a regular basis as market conditions and changes in your life happen.

Contact us for an individual appointment to discuss your personal plan.

Retirement Planning Process Wheel

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