After more than 30 years of service in higher education, I’ve had my share of seminars and workshops that were supposed to prepare me for middle-age spending, budgeting, investments, and those long-awaited retirement years. Well, I’m finally there – retirement. The freedom I feel is indescribable as I consider the blessings of having employer facilitated pensions to start the journey. In addition, our state facilitated Social Security pensions can foster an additional sense of security if you’re a recipient who has consistently worked and contributed to that bucket, during your employable years.
Even after attending these seminars over time, I couldn't suggest by any stretch of my imagination, that I could outline or explain the myriad financial orientations, precautions, or preparations that will be necessary for you to be properly set up for a happy retirement. What I can offer as your life coach, is an educated overview of what this planning should include. Here, my purpose is to position you to begin your journey while headed in the right direction and asking the right questions. This process is sure to get you on the path to more fine-tuned inquiries and meaningful discoveries about your financial preparedness for retirement and the years beyond.
My humble suggestions follow:
1. Research several financial advisors
Conduct a preliminary survey of various financial advisors and gain a sense of what each group promises to accomplish for their clients. Once you’ve chosen one with which you’ll embark on this exploration, request to begin your relationship with an overview of the ways that you can secure viable savings - including investments, and debt consolidation for retirement. Interviewing two to three financial advisors to assess communication and working styles, was helpful to me. I found a previous advisor to employ a teaching style that was less than effective for me. This unfortunately caused me to get discouraged at times, and to procrastinate getting to important tasks in a timely manner.
The right advisor achieved the exact opposite – I was excited to explore my possibilities, and to begin the planning and building of my financial wealth.
Your financial advisor and your coach should be knowledgeable and flexible enough to meet you exactly where you are and effectively guide you to drive the process from there.
2. Get important lists together
One of the first topics my financial advisor broached was that of my assets versus my liabilities. She explained that my first homework would be to draft a comprehensive list for each. I would then take the two lists back to her to determine my total net worth, and my liquid net worth. This information would then lead to examining other areas of my financial preparedness for retirement, such as current debt, debt consolidation and debt reduction (and truthfully, the goal here is to eliminate as much debt as you possibly can prior to retirement).
Remember - retirement for many, will likely involve a considerable reduction of income from what was earned during employment.
3. Manage credit card debt and monitor balances
My financial advisor then studied my credit card balances and other debt, and presented various methods for reducing and possibly eliminating them. This doesn’t mean that you won’t be able to use your credit cards anymore. The recommendation is that you follow established rules for avoiding overuse. The ultimate goal is to maintain your FICO and other legitimate credit score sources to build and strengthen credit worthiness. Once you’ve learned these rules and debt paying formulas, I promise you won’t want to manage your credit any other way!
4. Got your life insured?
Seriously consider securing a good life insurance plan if you haven’t done so already. According to www.bestmoney.com a recent survey conducted by LMRA indicates that 1-5 individuals in the U.S. do not understand general or particular concepts about the importance of securing life insurance. There’s also a noted tendency to overestimate the cost of life insurance, which would explain an overall reluctance of younger individuals, to address this need and it’s benefits more intentionally. I suggest that you secure a trustworthy group and a plan, as robust as you can currently afford- especially if you’re approaching retirement years in the next few years. If you have children, a spouse or partner or other significant persons in your life, securing a sound life insurance plan is one of the best ways to strengthen your future security and in turn, theirs.
5. Medical insurance transitions
Begin to research the types that will be available to you in retirement. I believe it is invaluable to also compare these new options, to your current employer facilitated medical insurance packages. As with your gross and net monthly earnings, there is a good chance that this new medical insurance could be offering a few less features than your current medical insurance. This possibly being the case, you would want to be aware in advance in order to plan an alternate course of action that takes your medical needs and your retirement plan offerings into account. This is all pertinent information that you should have, in order to make informed and educated plan choices.
Approximately three years prior to the end of my employment and journey through planning, I found a financial group that focused on the conditions and needs of women contemplating retirement. It made all the difference to me – really, it was like night and day when I compared this professional group to the previous ones I'd explored for my process. This again, is the reason for my suggesting that you survey several financial groups before settling with the services of your chosen one. They’re not all designed according to one approach, but once you’ve made that nuanced connection, it can suddenly feel like smooth sailings; like things are going to go your way! This then, is when you finally sit back and wait for that glorious retirement day to come! It is then, that you can reap what you’ve carefully and steadily sown.
Coach Mandy S.
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