Retirement Planning Steps to Consider Early
Making the shift from saving to translating your nest egg into retirement income can be stressful – especially when markets are volatile. Planning early can help you feel more confident about closing the retirement income gap between what you have now and what you want later. Here are some important steps to consider:
- Set your retirement goals. That way, you can figure out how much retirement income you need.
- List the expenses you expect. Once you determine what you want to do in retirement, you can estimate the income for what it will cost. Our Retirement Expense Worksheet can help.
- Inventory your income. What can you draw on in retirement? Work, Social Security, pensions and annuities are common options.
- Identify your investments. Get a handle on your 401(k) or other workplace plan, individual retirement accounts and other investments.
- Choose your withdrawal rate wisely. Withdrawing too much early in retirement could shrink your income later.
- Beware dollar cost "ravaging." If you're taking out a fixed dollar amount on a monthly basis, you're selling fewer shares when prices are high and more shares when prices are low. Consider adjusting your withdrawals during unusual market swings.
Work with your financial planner to design a retirement income plan for what you want – and make regular checks on your investment strategy and performance.