Creating a financial plan is one of the first steps someone should make when preparing for retirement. A financial plan not only keeps you organized but also guarantees less stress by providing a smarter way to handle assets. Kristan Anderson, who leads both the Financial Planning and the Retirement Planning Services departments for West Financial Services, explains why you should start thinking about it as early as you can. “What this current health crisis demonstrates is that the more time you give yourself to plan for retirement and to execute on that plan, the more resilient you can be under even the worst circumstances,” Anderson says. For those wondering how to get their finances in order, here’s a planning timeline that Anderson put together to help you get started.
10 years from retirement
At least a decade (preferably earlier) from your desired retirement date, you should start organizing and structuring your financial situation. “This gives you time to correct any previous mistakes, build up reserves, grow investment assets, and start thinking about what retirement ultimately means to you,” Anderson says.
5 years from retirement
This is the time to revisit your plan and make sure you are on track with your goals as your target date gets nearer. “You may have to reprioritize or make some adjustments but this check-in should give you a good sense of whether you can proceed as planned.”
3 years from retirement
Now the planning starts to get real, Anderson says: “When are you going to stop working? Do you have the appropriate types and amount of insurance? Are you going to stay in the area or move? Do you really know what you are going to do in retirement? It’s also time to make investment decisions to position yourself for future income needs.”
Less than a year from retirement
You’re in the home stretch. “Make sure your portfolio is well situated to weather any near-term financial storms. Keep a comfortable amount of anticipated immediate cash flow in a money market and address overall portfolio volatility through your investment allocation.”
Ready to get your finances in order? Visit West Financial Services’ website, westfinancial.com, or call 703-847-2500 for more information.
West Financial Services, Inc. (“WFS”) offers investment advisory services and is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. You should carefully read and review all information provided by WFS, including Form ADV Part 1A, Part 2A brochure and all supplements.
This information is educational in nature, not intended as any form of substitute for individualized advice, and not as a recommendation of any particular strategy, approach, product or concept.