It’s easy to fall into a set-it-and-forget it mentality when it comes to your retirement plan. Find out how a simple reframing approach can help your retirement plan reviews feel less daunting and keep your goals on track.
How often do you review your retirement strategy? No matter how many years away your retirement is, putting planning on autopilot can come with financial risks. That’s why it’s important to regularly review your retirement strategy and adjust as you go.
You can think of your routine reviews as “refinancing” your retirement. You may refinance your mortgage, car note or credit card debt, so why not your retirement? This regular review allows you to adjust your goals as necessary. Here are six factors to consider as you review your retirement strategy with your financial professional.
#1 – Your age
The first factor to consider is your age. Your investment, spending and savings strategy should adjust as you get closer to retirement and when big life changes happen, which can come at any age. As you approach your 60s, it’s a good time to re-evaluate your retirement portfolio and build out a Social Security timeline.
Each review you complete is also a great time to spot potential red flags on savings or spending habits that may make reaching your retirement goals more difficult. If you’re worried you may not have saved enough to last in retirement, you can explore supplemental options, like an annuity.
#2 – Marital status
One of the most significant financial changes that can impact you is marital status. A new marriage, divorce or the death of a spouse can affect your financial plans and outlook. For example, you may not worry today about not having a spouse's full Social Security benefit or pension after a divorce. But it could become reality and affect your retirement income. After a change in marital status, you may want to consider refinancing your retirement strategy to reflect your new circumstances.
#3 – Health concerns
Being able to plan and pay for potential health care needs is a critical part of any long-term savings plan, especially since some health problems may have severe financial impacts. Health care expenses can derail even the best-laid plans, even if you have Medicare. When health issues arise, you may want to revisit your retirement objectives and consider a new strategy.
#4 – Job changes
A new job, leaving a job or getting let go can impact your potential retirement income and savings. Whether you find new employment and benefits or don’t, this change can impact your savings, health insurance and tax strategy. All these changes could impact your financial goals for retirement.
#5 – New assets or debt
Major changes to assets and debt or expenses is also a good time to review your retirement strategy. If you purchase a vacation home, receive an inheritance or have new medical debt, it may disrupt your cash flow and other financial objectives. It may also change your retirement goals and income requirements, life insurance needs and potential tax consequences. If you are considering new assets or have debt, be sure this is reflected in your updated retirement strategy.
How annuities can play a role in retirement
Life is unpredictable. While it’s not easy to think about, you’ll likely face several life events that could impact your retirement income. Longevity risk, health, market volatility and lifestyle changes can all affect whether you will have enough income to last throughout retirement.
Annuities can help provide greater financial stability in retirement, even if you experience life changes that impact your savings and retirement income goals. You can use an annuity to create guaranteed retirement income for life. This can help you stick to your retirement strategy even if major life changes occur.
Several options for annuities exist that can help meet your specific needs and retirement goals. Some provide built-in features that let you increase annual income benefit withdrawals to support long-term care for you or a loved one. You also have the option with certain annuities to roll over benefits income and reserve those withdrawals to help cover expected future expenses.
Talk with your financial professional to find out if an annuity is a good fit for your retirement goals.
Explore these additional topics as you consider annuities:
- Boosting your retirement planning confidence with annuities
- 5 essential plans for retirement
- How much do I need to retire?
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