Five Considerations When Planning for Your Retirement

It’s never too early to start planning for your retirement in Phoenix, AZ. The earlier you plan, the more financially secure you’ll be during your golden years. If you’re wondering how to plan for retirement, keep the following helpful tips in mind.

Diversify your portfolio

While you might feel like playing it safe and avoiding the risk of investing in the stock market, it’s not a smart idea if you want to make the most of your savings. Stocks provide great opportunities for growth, and it’s often recommended to have a diverse portfolio that includes stocks, bonds, mutual funds and other assets. While you consider planning for retirement in Phoenix, AZ, remember that a well-balanced portfolio can help you weather downturns.

Push your retirement accounts further

If you can, contribute the maximum amount each year that’s allowed for any 401(k), IRA or other retirement plans you have. In particular, if you have a 401(k) with an employer, try to contribute the maximum amount your employer will match each year.

It’s smart to consolidate your retirement accounts as you get closer to your target retirement date. Think about combining IRAs of the same type to give yourself a better idea of the assets you have to work with. If you have 401(k)s from former employers, talk to a trusted fiduciary advisor about distribution options and other ways to consolidate these accounts. An expert opinion can give you great peace of mind and confidence in your choices.

Reduce debt

Going into retirement debt-free is a great feeling. Try to eliminate mortgage payments and credit card debt prior to retirement. Reducing your existing debt allows you to use your retirement income on your wants and needs, instead of on interest payments.

Make projections about your retirement income

One of the toughest tasks when determining how to plan for retirement in Phoenix, AZ is estimating your future income. You’ll have to take into account Social Security payments, as well as employer pensions if you have them. Your wages, savings and investment accounts will round out the rest of your income.

Consider future expenses

Spend some time taking stock of your anticipated future living expenses. While there’s no way to get a completely accurate dollar amount, you can come up with a pretty good estimate by taking the following factors into account:

  • Living expenses: Calculate your basic living expenses, including food, transportation and housing. Many retirees benefit from downsizing later in life—this frees you from the burdens of homeownership and frees up assets if you own your own home.
  • Medical costs: Retirees over the age of 65 rely on Medicare to cover the majority of routine healthcare costs, but you should always consider supplemental coverage for special circumstances. It’s smart to invest in long-term care insurance to protect your retirement savings in case you have to enter an assisted living facility.

It pays to consider planning for retirement in Phoenix, AZ at an early age, even as soon as you get your first full-time job. Always work with a trusted fiduciary advisor so you make the right decisions for your future. Contact Fiduciary Advisors, LTD. today to learn more about how proper planning helps you secure your financial future.