By Jay Shareef and Chris Rhoads
Retirement is one of the most discussed financial topics, and it’s easy to understand why. A substantial retirement plan should enable you to live comfortably for decades while preparing you for an array of possible unknown outcomes.
While comparing your retirement to your neighbor’s or friend’s retirement plan may not be good for your mental health, some general benchmarks can give you insight into how well prepared you are for your retirement.
Context Is Key
Before we dive into some common retirement benchmarks, keep in mind there is no magic number when it comes to retirement. There has always been uncertainty surrounding retirement, and today that uncertainty is compounded by people living longer, increasing healthcare costs, and doubts surrounding Social Security.
Retirement is also incredibly personal and individualized. Your desired lifestyle in retirement may look completely different compared to a neighbor or friend. Maybe you would like to downsize and live in a smaller home. Or maybe you want to spend more of your time traveling full time and want to rent your home on Airbnb to supplement your income. This means that your income requirements are going to look different compared to a neighbor or friend who wants to keep their home and travel once a year, for example.
Retirement Strategies In Your 40s
Conventional wisdom suggests that by your early 40s you should strive to have rid yourself of your student loans, credit card debt, car loans, and other consumer debt. You also want to have a plan in place for any future education costs for your children so you can ease their future reliance on student loans.
By your 40s, some suggest that you want to have at least twice your income saved and invested in proper retirement accounts. Having at least twice your income saved will help immensely once you actually retire.
Retirement Strategies In Your 50s
Your 50s are a great time to start taking advantage of any catch-up contributions that you may have available to you through your employer. This will help you make up for the early years in your career in which your retirement contributions were not as robust as you would have liked.
Other strategies to explore at this age include looking at insurance options, such as critical illness insurance or long-term care insurance for both you and your spouse. Though you probably don’t need this type of coverage now, you want to purchase such insurance well before you may need it.
Retirement Strategies In Your 60s
While you should have been meeting with your financial advisor before this stage of life, it is really important to meet with your financial advisor now to streamline any retirement goals throughout this decade. We at Certa Advisors are experts at helping federal employees take the necessary steps to secure their retirement; together we can finalize your retirement timeline, figure out the best age for you to retire, review your will and estate plan, and make any life insurance changes that you need.
How We Can Help
Retirement planning can be detailed and overwhelming, but you deserve to secure the retirement you have always wanted. If you don’t already have an advisor helping you do that, reach out to us at (301) 798-5250 or schedule a phone call now.
About Jay
Jay Shareef is vice president, financial advisor, federal benefits consultant, and co-founder at Certa Advisors. As a U.S. Army veteran, Jay is passionate about helping federal employees create a bulletproof plan for retirement and navigate the often confusing and complicated federal benefits landscape. He spends his days educating and providing clients with unbiased insurance benefits and retirement strategies to help his clients create guaranteed income for life. As a problem-solver and trustworthy resource, Jay always puts his clients and their needs first so they can find financial peace of mind. To learn more about Jay, connect with him on LinkedIn.
About Chris
Chris Rhoads is a co-founder and vice president of Certa Advisors. As a registered investment advisor and independent financial professional, Chris is committed to helping his clients in retirement and he takes a holistic approach to financial planning that includes insurance and risk management, investments and wealth management, retirement income planning, and estate and tax planning. Chris has been married to his wife Tia since 2009 and they live in Frederick, MD together with their two young daughters. In his free time, Chris enjoys traveling, watching sports, and being active in causes he cares passionately about. To learn more about Chris, connect with him on LinkedIn.