Keeping your retirement goals top of mind is key to keeping your strategy on track, regardless of your age.
Retirement Course Change: What’s Next?
You thought you were cruising along in your path to retirement. You had a plan and nothing was going to stop you from reaching your goals.
But then your plans changed. Maybe instead of retiring at 65, you need to retire a few years earlier due to your health. Maybe the firm you thought you’d retire from gave you a pink slip. Or maybe you thought that selling your house and downsizing would give you a leg up in retirement, but your equity is lower than you planned.
While changes to your retirement plans can happen at any age, they can be more challenging to overcome when you’re older since your timeframe to get back on course can be limited.
“Although you may be on track one day for retirement, life can get in the way, and you’ll have to adjust,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “When this happens, you may want to take a hard look at your current financial situation heading into retirement and what you need to do in order to better reposition yourself to live comfortably during these years.”
If you get hit with an unexpected financial event, here are some things you may want to consider as you approach your golden years.
- Plan your lifestyle: Before diving into the nitty-gritty details of your portfolio, you should figure out what you want your retirement to look like. Can you maintain your current lifestyle in retirement? If you’re way behind in retirement savings, you may need to make decisions to downgrade your lifestyle. Depending on where you’re at financially, this could involve minor changes such as going out to eat less or big changes such as downsizing your home. But before you can make big changes, you must reassess your budget.
- Revisit savings: Once you have a new, realistic vision of your retirement, it’s time to take a look at where you are financially and what you need to save to reach your goals. For many people, that will involve upping savings. If you’re over 50, you are allowed to contribute more to IRAs and 401(k)s than you were previously (see the IRS contribution limits). If you’ve reached the maximum contribution limits for both your employer-sponsored accounts as well as your IRA, consider investing money in a taxable account.
- Contemplate working longer: If possible, delaying retirement, even if just by a few years, can have a tremendous impact on your financial position. You have more time to grow your portfolio, won’t need your portfolio to last as long, and you could take advantage of potentially higher Social Security payments.
- Understand your priorities: One challenge you may face is that your limited resources are pulling you in many different directions. Maybe your child just graduated from college and needs financial support as he or she begins adult life. Maybe your aging parents need help with their health care costs. In these cases, it’s important to set some boundaries, if you haven’t already. You may have to tell your college graduates, for instance, that you’ll pay their cellphone bills for the next year but then they’ll have to take on the cost themselves. Or maybe you need your parents to move in with you to cut down on costs.
- Consider consulting a professional: Figuring this all out on your own can be difficult, so you may want professional guidance, including solutions offered by Scottrade Investment Management.*
How has your approach to investing shifted as you neared retirement?
Read Next: How Do You Imagine Retirement?
*Solutions offered through Scottrade Investment Management involve additional fees.
The information and content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.
Guidance Solutions from Scottrade Investment Management and Advisor Access from Scottrade Investment Management are investment advisory services offered by Scottrade Investment Management, Inc., a registered investment advisor. Brokerage products and services are offered through Scottrade, Inc., member FINRA / SIPC, while advisory services are provided by Scottrade Investment Management, Inc. Scottrade Investment Management, Inc. and Scottrade, Inc. are both wholly owned subsidiaries of Scottrade Financial Services, Inc. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business.
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