Since the first of the year, Woodmont has worked with a number of clients who are nearing retirement and want a ‘status check’ on their investments and preparation for retirement. In light of these conversations, we wanted to share a few key considerations if you decide to under-take a similar exercise.
10 Steps to Take Today If You Are Planning on Retiring in 5 Years:
1. Locate all statements for financial and insurance accounts/policies - This is especially important for outstanding retirement plans that may remain from a prior employer but were never rolled over.
2. Review and discuss your household budget - Determine what spending continues when retired, what increases and what decreases?
3. Dream about and articulate your retirement goals - Do you want to travel extensively, buy a new house, move to the beach, volunteer?
4. Assemble the Facts - Compile a comprehensive balance sheet that totals all the family assets including investment account, real estate, etc.
5. Look risk exposures & make adjustments to asset allocation – Using the new balance sheet, look at the total asset allocation and all risk exposures. Develop a roadmap of where your asset allocation needs to be and a glide path for getting there. Consider involving a trusted financial advisor to assist in this process.
6. Figure out your Social Security approach - look at your Social Security statement and begin to develop a strategy of when to begin your benefits.
7. Manage concentration and liquidity risk - It is important to understand when liquidity becomes available for investments in private partnerships, stock options, etc. Can you use charitable planning to mitigate tax risk for investments with an extremely low cost basis?
8. For business owners - Think about succession/transition plans and how you can start preparing your business today to realize maximum value later.
9. Continue the legacy conversation - Does your estate planning currently reflect your financial situation and values? Are your heirs prepared for the wealth they may receive? If not, how can you begin to prepare them?
10. Go for a walk - The data is clear - being healthy is the best thing you can do to improve your happiness. Start today in improving your health so you can be around to enjoy your retirement.