Wait… How do I retire?

For most folks there is an order to things. We enter the workforce. We put our heads down, work hard, put some money away for “the future” and go about our business. Then we have kids, take on mortgages, keep working and maybe advance in our careers. The kids get older, graduate from school, mortgages get paid off and then one day a letter arrives addressed to you from AARP and your immediate reaction is “oh, they must have sent this to the wrong address” until you realize oh no, I am actually turning 50. Maybe I should start thinking about this future. Specifically retirement. It may be time to think about retirement and what it may look like for you.

To help, I am offering a step-by-step process to see where you stand.

Determine your goals.
The first step is to determine what your goals are when it comes to retirement. Is it as soon as possible? A certain age? Maybe work forever because I love it. It is also important in this step to determine what you want retirement to look like. Will you be traveling? Babysitting grandchildren? Spending more time with a charity you are passionate about? Every retirement situation is going to be unique so carve your own path based on what you are looking for.

See where you are.
The next step in retirement planning is to take stock of where you currently stand. It helps to consolidate all your information in one place. This will provide a sense of what you have and what you are doing currently.

Project out to the future.
This is where you can run projections to see where your current path will take you. Does it line up with your goals? When it comes to this step there are financial software programs that allow user to run projections. Bankrate.com is one such platform that provides users the ability to run basic projections on their own. Financial planners also typically have software programs they would be able to use if you are looking for more dynamic projections.

Make adjustments.
Once you project out into the future you can now see if you are on track to meet your goals. If you find that you are not on track, you can make the necessary adjustments to put yourself on the path to your goal. This is the big step. It is great to see where you are projected to end up but this is where you then need to make a determination on any changes that need to be made for you plan. If you are projected to fall short of your goals then you may need to save more, work longer, adjust your goals or perhaps some combination of all three.

At this point I will make note of the fact that many people fear this process. They are afraid that they are going to look at their scenario and they are not going to like what they see. I completely understand that natural reaction. No one likes to see they are not on track. But what I can tell you from years of meeting with clients is that the clarity this process provides more than outweighs the discomfort it may cause. The other note I will make is that the sooner you take the steps, the better your chances of success. Time is the great equalizer and the more time you have the more impactful the changes you make will be. And as one mentor of mine always said: “You are never further from retirement than you are right now.”