Navigating Retirement Planning
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Retirement Planning With The Bad, the Better, the Even Better, and Common Surprises

Everyone has retirement dreams: Where are you going to live? How often are you going to travel? How often can you go to a restaurant, a casino, a concert, a show? Unfortunately, though, most of us have to face “retirement reality,” especially given the recent state of the economy. Dreams, however, are important and “great to haves” since they can help drive your retirement savings upward. Here’s some sound guidance that can help you navigate retirement Planning for your retirement and help you to avoid bumps in the road.

The Bad:
With inflation at an all-time high, the invasion of Ukraine, plus this whole pandemic nightmare, many of us have had at least some of our retirement savings diminished. Meanwhile, to make matters more uncomfortable, our expected retirement expenses are even more unknown. It’s difficult to plan during such tumultuous times, but don’t give up; do some tweaking now to your savings plan and you’ll almost assuredly be in better shape than if you didn’t take any action.

The Better:
John Pisapia, President of NYC-based Chelsea Financial Services, has some great advice that guides many of his most successful investors. “Make sure that your holdings are diversified, but feel ok about taking some calculated risks. Calculated risks can sometimes create gains that help offset past losses and offset present (and future) inflation. Just make sure that you place the right percentage of your total investments in higher risk instruments, based on where you are today compared to what your personal financial goals are for your retirement.” stated Pisapia. “Diversification can help you feel more secure, especially when you know that your riskier investments are managed at a comfortable level.”

The Even Better:
To help mitigate “The Bad,” the most simple action you can take is to increase your savings percentage now to offset any losses or inflationary impacts. And the easiest way to do that? Find ways to cut costs today and in the future.

Simple reductions to your expenses can make a huge savings impact over time, like streamlining your streaming services, cutting back on meals out (and take out!), price shopping/comparison shopping, buying in bulk & vacuum freezing your bulk items (reducing waste), booking travel when the prices are low or at least, booking well in advance, and using coupons/apps/ offers wherever and whenever possible. Use an app or a spreadsheet to track all of your savings, and deposit that weekly or monthly into your retirement savings account(s).

If you are employed and your employer matches your 401K, make sure to save the maximum percentage that your employer matches. And if you’re self-employed, pay yourself a bonus for every third or fourth project or job that you do and deposit that right into your retirement plan.

Besides reducing expenses, consider creating another stream of income or additional income, just for your retirement plan. There are great affiliate marketing programs and internet marketplace opportunities that require very little financial investment but can reap major returns on your time invested. Or, if you can work overtime or get bonuses for additional work or project success, that’s another great way to increase your income.

The Common Surprises:

Sudden Unexpected Expenses
Many retirees are taken by surprise by sudden unexpected expenses for which they didn’t plan. Leave some room in your budget for these unplanned items, things like car repairs, home repairs, increasing property taxes, increasing utilities costs, dental work, health/prescription expenses, insurance premium increases, pet care, and so many more unknowns. Plan a budget, building in typical inflation, then add at least $500 monthly for unexpected expenses.

Tax Bracket Woes
If you are increasing your income, watch your projected tax bracket and its potential impact on your earnings. The worst thing to discover is that you just passed the threshold for the next tax bracket after some months of working extra, and that may effectively wipe out some or all of your additional earnings. Planning with tax strategy in mind is paramount to making any extra income successful for your retirement plan.

Conventional Wisdom Doesn’t Apply
The conventional wisdom was that you needed 70% of your preretirement income to maintain your standard of living. With today’s current rate of inflation, that apparently no longer holds true. In fact, some retirees today are spending more than they did during their working days. According to J.P. Morgan Asset Management, average household spending for 65-69 year olds in partially and fully retired households with investable assets of $1 to $3 million spent nearly $94,000 annually, and 75-79 year olds spent over $83,000 annually.

In summary, it’s not all “doom and gloom,” even though there’s been a lot going on with the economy. With additional planning, a few extra steps taken, and some budget tightening, you can be more in control and more assured of a positive retirement outcome for you and/or you and your loved one(s). Follow that up with continuous retooling of your plan and you can hopefully mitigate the external forces out there to make some of the Bad Better.

For a Free Consultation or expert financial guidance, please contact Sandra Keir of Keir Planning via our Contact Page. Sandra Keir, CFP®, CRPC - CERTIFIED FINANCIAL PLANNER™ & Certified Retirement Planning Counselor, has over 25 years of experience in the Financial Services industry, serving Sarasota, St. Petersburg, and Tampa Florida. Securities offered through Chelsea Financial Services (NYC), member FINRA | SIPC | MSRB. Advisory Services offered through Chelsea Advisory Services, Inc.


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