The steps you take today can play an important role in your future financial well-being. National Financial Planning Month is a great reminder to review your current finances, revisit your goals, and determine whether you’re on track to meet your goals.
You don’t need to have every detail figured out, but asking the right questions and making small adjustments along the way can help you feel more confident about the road ahead.
Start With Your Retirement Goals
Retirement looks different for everyone. Some people dream of traveling, while others look forward to spending more time with family, volunteering, pursuing hobbies, or simply enjoying a slower pace of life.
Consider asking yourself:
- When would I like to retire?
- What kind of lifestyle do I hope to have?
- Where would I like to live?
- What expenses might change after I stop working?
Having a general vision for retirement can help guide many of your financial decisions.
Know Where Your Retirement Income May Come From
Many retirees rely on a combination of income sources rather than a single account or benefit.
Depending on your circumstances, retirement income may include:
- Social Security benefits
- Employer-sponsored retirement plans
- Pension benefits
- Personal savings
- Other financial assets
Understanding your potential income sources can help you evaluate whether you’re on track to support your desired lifestyle in retirement.
Understand Any Pension Benefits You May Have
If you have access to a pension, it’s worth taking time to understand how the benefit works.
Some questions to consider include:
- When can benefits begin?
- How are benefits calculated?
- What payout options are available?
- Are survivor benefits available for a spouse or beneficiary?
- How does the pension fit with your other retirement income sources?
Even if retirement is still years away, becoming familiar with your benefits now may help you make more informed decisions later.
Review Your Monthly Financial Obligations
Retirement planning isn’t only about saving. It’s also about understanding your future expenses.
Take a look at:
- Mortgage payments
- Auto loans
- Credit card balances
- Other recurring obligations
Reducing debt before retirement may provide greater flexibility when living on a fixed income.
Consider How Your Mortgage Fits Into Your Retirement Plan
For many households, housing is one of the largest monthly expenses. As you prepare for retirement, it may be helpful to consider how your mortgage fits into your long-term financial goals.
Questions to think about include:
- Will your mortgage be paid off before retirement?
- How will your monthly housing costs fit within your retirement budget?
- Are you planning to stay in your current home long term?
- Could downsizing or relocating become part of your future plans?
Prepare for Unexpected Expenses
Life is full of surprises, and retirement is no exception.
Healthcare costs, home repairs, vehicle maintenance, and other unexpected expenses can affect even the best-laid plans. Building and maintaining emergency savings may help provide an additional layer of financial stability as you prepare for retirement.
Planning for the unexpected can be just as important as planning for the expected.
Review Beneficiaries and Important Documents
Beneficiary designations are often easy to overlook, but they can play an important role in your overall financial plan.
Take time to review the beneficiaries listed on:
- Retirement accounts
- Life insurance policies
- Other financial accounts
It may also be a good opportunity to ensure important documents such as wills, powers of attorney, and healthcare directives reflect your current wishes.
Major life events such as marriage, divorce, the birth of a child, or the loss of a loved one may warrant updates.
Make Retirement Planning an Ongoing Process
Retirement planning is rarely a one-time task.
Income, expenses, goals, and personal circumstances can change over time. Scheduling a regular financial checkup can help you:
- Monitor progress toward your goals
- Review retirement income projections
- Adjust plans for changing circumstances
- Identify opportunities for improvement
Even small adjustments made today may have a meaningful impact over the long term.
Looking Ahead
National Financial Planning Month is an opportunity to take a fresh look at your retirement readiness. Whether retirement is still decades away or right around the corner, understanding your goals, reviewing your income sources, and evaluating your financial obligations can help you make informed decisions about the future.
The most important step is often the simplest one: taking the time to review where you stand today and determining what actions may help move you closer to your retirement goals.
This post is for informational and educational purposes only. It does not constitute financial, legal, or lending advice and is not an offer to lend. Consult an appropriate qualified professional regarding your individual circumstances.
