Get started. A plan is just the starting point. It should be realistic and attainable and remember it doesn’t need to be perfect. Don’t worry about when your where you’ll retire. You can tweak the plan as you get closer.
Use a calculator. Use a retirement assessment tool to measure your progress. There are available online for free. These calculators help project your expected income from your investments and your social security. That way you know what you will have as resources.
Save. Most people need to increase their savings to reach their retirement goal. We can’t control the stock market but we can control our spending and savings habits. Make an effort to track your expenses and look for areas where you can cut back and put more towards retirement.
Take advantage of tax advantage accounts. Maximize contributions to your retirement accounts such as your RRSP’s or your 401K.
Allocate your assets. Figure out what combination of stocks, cash, and bonds is best for you and what kind of risk you are willing to take.
Review your plan annually. Review your plan at least once a year, especially when there has been a big change or life event.
Consolidate. Consolidate your retirement accounts into one. This will let you combine similar assets into a single account to manage.
Don’t wait. Don’t just come up with a plan, take action. Put the wheels in motion. There is never a perfect time to start, just start now.
Don’t rely on inheritance. You may not receive one so don’t plan on it being your saving grace if you don’t save properly. In 2004, only 20% of baby boomers received an inheritance. Don’t be caught unprepared.
Reality check. Be flexible and manage expectations. Remember, there is no magic formula and that nothing is certain. Proper planning is the only way you will have a comfortable retirement.
