One of the most important parts of planning your estate is planning your retirement. Without a well-supported retirement plan, you won’t be able to pass anything on in your estate plan to your heirs and you’ll be stressed in the twilight of your life, worrying about whether or not you’ll have enough to go on and be able to pay for your health care. It’s important to establish a retirement plan and ensure that you’re ready for retirement as you think about your estate plan because they go hand-in-hand.

The Reality of Being Financially Prepared to Retire

For most folks, retirement seems like a far off dream at the moment. It’s something like your estate plan in that, you have a plan but you won’t be needing it for some time yet. It’s an easy thing to put off for that very reason, but that could land you in a very bad place financially and with nothing to leave behind in that estate plan, you spent so long putting together. So, how do you build a retirement plan from the ground up that will support you and your heirs in the future? Let’s take a look.

Determine Your Vision

First, you’ll have to sit down and flesh out your idea of what your retirement will look like. You’re going to need a considerable amount of funds to have a comfortable retirement, but just how considerable those funds are going to have to be can’t be determined until you have a set view for what your retirement is going to look like. First, you’ll need to outline a couple of your goals for your retirement fund. Ask yourself if you plan to live abroad and what that might mean for your taxes. Ask yourself if your spouse shares the same vision of retirement as you do? How active are you intending your lifestyle to be? Will you travel often? Do you intend to buy lots of gifts for your children and grandchildren? Sit down and have a conversation with your spouse about what your expectations are for retirement and move forward from there.

Outline Your Expenses

When most people retire, their mortgage is almost all paid off. You won’t need to buy work clothing quite as often as before and you won’t need to spend much on repairing and driving a car around for your commute every single day. However, those small savings won’t mean that you’ll be spending far less in your retirement. You’ll likely end up spending the money you save on those things on travel, hobbies, and other things that you’ll utilize to fill your time on a more regular basis. You can also, unfortunately, expect health prices to rise as well as you grow older as you may develop ailments of some kind or another. There are lots of general guidelines that say you’ll need around 70% of your working income to have a comfortable retirement because that generalized range won’t be enough for you. Retirement is different for everyone and everyone lives within their means in a different way. Take the time to really estimate what your expenses will be.

Then, consider inflation. This is, by far, the most stressful about planning for retirement. The cost of living is constantly increasing and that makes it much harder to save for retirement. What was once a suitable retirement is now much harder to live on, and it will likely increase as time continues on. So, be sure that whatever you’re thinking of putting away considers this possibility and reflects inflation rates.

Organize the Income Sources That You’ll Have

The best way to retire is to have income coming into you from multiple places. You may have a pension that you can count on, as well as several retirement savings bundles and investments in the markets that you can rely on. However, depending on your age, government retirement is becoming a less and less likely source of income for those that are retiring later, rather than sooner. You’ll need your own resources to fill the gap that the lack of government support will leave, and that’s no easy task. You’ll need to look for income through continuing to own a small business, investing in rental properties that you can keep throughout retirement or other taxable accounts like a 401k and IRA of some sort. This can be tailored to your preferences based on a variety of factors including whether or not your spouse retires at the same time as you, whether you’re getting a pension, and how long the small withdrawals will last from your savings accounts.

Creating a tax minimization strategy to ensure you’re getting the most from all of your revenue streams is, perhaps, one of the most important ways that you can save money throughout retirement and ensure that your heirs have something from your estate, too. Before you begin establishing your estate plan, we recommend sitting down with a financial adviser and exploring your options and setting up a comprehensive plan that can make you feel safe and secure in your future. That ensures that you’ll be able to understand what money you’ll have left to give to your beneficiaries when all is said and done.

Balancing Your Portfolio

Ensuring that you have something to give away at the end of your life and that your estate plan comes to fruition how you imagine it starts with making sure your retirement portfolio is air-tight. To be fruitful, your portfolio will need to have the exact right balance of risk and safety. If you’re expecting your portfolio to fund decades into the future, it has to be as strong as possible, especially since life expectancies are climbing globally.

Master Capital Growth

The most important thing your portfolio needs to do is keep growing. Safe investments are just that, safe, which almost never translates to real growth. Having a diversified portfolio that’s full of bonds, stocks, and just plain cash is the best way to maintain a steady income before and into retirement. You’ll want to have your portfolio honed so that you’re taking advantage of tax opportunities, capital gains, and other loopholes as much as possible. This will protect you from relying totally on interest which is likely to fluctuate over the years. Once you’ve got all of this done, your portfolio’s only job needs to be managing risk tolerance and toggling the years of retirement you’re hoping to take off. Having growth assets means you’ll need to be vigilant about market volatility and constantly engaging with your financial advisor to make your life easier and your portfolio feel more secure.

Be sure to hold fast to that old rule: the older you are, the safer the investment needs to be. Market volatility when you’re young isn’t too much of a concern, as downswings mean you’ll be able to buy investments for less money and they’ll upswing again afterward. Once you’re getting closer to your retirement, you’ll want to reel those growth assets in and consolidate them, as you may not have time to wait for the market to swing back in your favor. Make sure to protect yourself, regardless of the age, with a cash cushion that can protect you from falling markets and make paying your bills a no-brainer, even when your investments look precarious.

How to Get On Track

If you’re worried that you’re a little off track for your retirement, even if you’re a couple of years out, there are a few things you can do to start getting yourself back on track sooner, rather than later.

First, you’ll need to start hacking and slashing any high-rate consumer debt you currently have. Every dollar per month that you don’t have to put toward an unnecessary bill you can then put toward your retirement, and that’ll add up quickly. Additionally, fold a contingency plan into your retirement plan. Insurance and savings can ensure that you’re protected from illnesses, job losses and other potential issues that could throw you off your retirement savings plan and make you feel less secure about your legacy and what you’re passing down, eventually with your estate plan.

Most importantly of all, when you get a new, higher-paying job, put some of that bonus away for yourself later. In fact, be sure you’re putting a little more of your paycheck away every year. That’ll help to bolster all of the savings measures you’re already taking, and the best part is that you can schedule it to come right out of your paycheck, so you won’t end up missing any of the money.

Settle Your Nest Egg and Invest in Your Legacy

Your legacy is what you’ll leave behind. You’ll leave your family and friends with good memories. You’ll leave behind all of your accomplishments that other people will remember you by, too. But will you leave behind anything for your heirs? Start investing and saving so that by the time you’re ready to leave, you’ve ensured that your family will be alright when you leave them behind.

Discuss Your Estate Plan With Goldberg & Associates in Atlanta

Here at Goldberg & Associates, we’re passionate about helping you establish your estate plan and feel secure that you’re leaving your legacy in good hands. We provide comprehensive estate planning services to help you get all of your wishes in order now so that you don’t have to worry about it in the future. Start preparing for your family’s future now, Schedule an initial consultation with us today.