Financial Planning Tips

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Mario Gabalda, Financial Advisor at Ameriprise Financial, shares the following steps to help you prepare for — and feel more confident about — your retirement.

1.    Determine your vision. One of the most enjoyable parts about planning for retirement is deciding how you’ll spend your time. Though you could just be looking forward to relaxing, you may also decide to move to a different area of the country, travel, volunteer or spend more time with family and friends. Your plans can always change, but creating a list of activities you may pursue is a valuable part of the planning process.

2.    Start with the basics. Developing a written plan is the first important step, but before you get too caught up in the numbers, determine what you will absolutely need to maintain your lifestyle during retirement. Include basics like groceries, mortgage payments, healthcare costs and other financial obligations. You may want to make a list of areas where you could cut back and reduce your expenses if you hit a financial roadblock in the future.

3.    Make your plans concrete. Many people get hung up on this step, as it can come with a tough reality check. To begin, calculate how much money you’ll need to cover your essentials over the course of a 30 year retirement, then add discretionary expenses that accompany activities and lifestyle goals – such as travel and hobbies. Be honest with yourself and try to account for cost-of-living increases and rising healthcare costs in your projections. This will give you a rough estimate of how much “income” you’ll need in retirement to replace your paycheck and achieve your desired lifestyle. Then consider all the sources you can draw this income from – such as a 401k, annuities or cash savings. Also consider breaking this amount down into smaller goals that you can more easily prioritize, manage and track.

4.  Protect your plan and your legacy. Ensure the beneficiary information on your accounts is up-to-date and that you have the right insurance and protection plans in place to safeguard your income and assets now – and for the long-term. Also begin thinking about the legacy you want to leave – to your family or to organizations you value. Involve your loved ones in these conversations and clearly communicate your intentions and expectations.    

5.   Track your progress. Like with all goals, it’s important to set milestones, check-in and reflect as you go. Keep in mind that a little time and organization goes a long way. Set aside one day each month to sit down with your finances, and also consider meeting with a legal and financial professional annually. Even if your goals still seems far away or if you’ve experienced a setback, you likely won’t regret spending the extra time to review your progress. This also provides a good opportunity to make adjustments if your situation or plans for the future have changed.  

Retirement planning can be a complicated, emotional and overwhelming process. Consider seeking objective advice from a professional financial advisor who can guide you through it and ensure you are aware of all of your options. Remember that while it may be a bumpy ride to retirement, the surest way to feel confident about what’s to come is to do all you can to prepare for it.

These tips were provided by Mario Gabalda, Financial Advisor with Ameriprise Financial Inc., 8045 Leesburg Pike, Suite 500, Vienna, VA, 22182; 703-610-7228; [email protected];



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