The final lap before Retirement is approaching: We have 6 ways to get yourself ready!

The vast majority of people become even more focused on saving and planning as they near their retirement age. The most frequently asked questions that we hear people say to us is. Will we have enough money without working? and When can we retire? But what about high earners who should have enough money for their retirement years. Is retirement planning still necessary? What type of issues are they concerned about? This may come as a surprise, but no matter what your net worth, many of the worries are similar. The best advice we give to our affluent cients can be discerning for anyone nearing retirement and may be helpful for you as you plan for this stage in your life. In this blog we will talk about the countdown to retirement and explain seven common sense ways to get ready.You should plan to live longer than you think you will - One of the most important facts that our clients fail to realize is that they will have a long retirement, much longer than than their parents. In fact a 64-year-old today can usually expect to live 20-25 years according to the Social Security office. To put it in better context 25% of 64-year-olds can reach age 90 and 10% of people will reach age 93-96. What this means even if you spent 40 years working, you may live another 30 years in retirement. This unequivocally shows the need for saving as much as you can for retirement while you are working. Primarily you are going to need to support yourself and your wife for a much longer time in Retirement.Make plans to save as much as you can: It should not be surprise to you that having asset set aside for retirement is imperative, no matter how wealthy you are. Even those who where high earners during their working lives will not be in great shape during retirement if they do not get a handle on spending and not saving enough. There are many stories of high income earners who spent too much on a big house, fancy cars, and many vacations just to end up with little in Retirement savings. Just to be clear it can be a difficult challenge to save for retirement , and you will need a good-sized nest egg to support the lifestyle that you used to when your ready to retire. In addition, did you know that that 42 percent of workers who are 54 or older have less than $100,000 saved for retirement. This is not nearly enough for retirement savings even with your Social Security check, when you think about what you will need for your yearly living expenses and not much more. Depending upon your age you may not be able to save consistently over your lifetime and you will come up short for retirement. The ability to save is generally related to where you are in the life cycle (Accumulation Phase) and how much are your living expenses.Plan on spending more than you expect: We are seeing that our clients spend just about as much in retirement as they did during their working years. There are a couple of reasons for this. Even though your primary mortgage is paid off, some of our client's are purchasing Condominium's or smaller homes in warmer states and visiting withtheir grandchildren with their free time. Also, while you were working you did not spend as much money during the day. But, when you are retired just about everything you do with your free time tends to cost you money. It is a good habit to make out a budget and stick to it when you and your wife sit down together with your Advisor to estimate your monthly retirement expenses. You and your wife will at some point slow down and will not be as active, because of aging or sickness and your expenses may shift to primarily to healthcare or assisted living. Some of High net-worth clients will tend to pay for their long-term care needs out of pocket because they have the resources to do so. But for most people thinking of self insuring is a risky endeavor. The cost of long-term care insurance can be expensive and many times it is not easy to qualify for payouts. One of the more difficult decisions in retirement is to figure out how to pay for the costs associated with aging into your planning.Think about working longer than you anticipated: Most likely your expenses are not going to decrease very much in retirement and you're likely to live for a long time after you retire, and one of the best idea's for ensuring you have enough money to last is to keep working as long as you can. Incidentally, just about everyone wants to stop working at some point. Also, given that these may be your highest earning years and you just might to be in your 90's, our suggestion is to consider working as long as you are able. For the last 10-15 years it turns out that we are working longer. According to the Social Security office, more Americans are delaying retirement untilthe age of 65-70. The age at when you choose to retire can also affect your expenses in retirement. In addition if you retire age 65, you will not qualify for medicare:for many people this means you will have to pay for your own medical insurance. Also, many people choose to work longer,so they can defer taking Social security until age 70 which has the highest benefits. You will get a significant higher benefit higher benefits if you defer taking Social Security until age 70.Definitely plan on continuing investing: There are many factors when it comes to managing an investment portfolio during retirement. For a majority of our clients, we do not get overly conservative with your investments, because your nest egg has to last longer. Assuming that you have made it successfully to retirement and are living within your means throughout retirement, your portfolio can keep growing during retirement. It is not uncommon for some people to think that they should take less risk with your equity investments as you approach retirement and during your retirement in order to keep growing. To be clear, what we are saying here is, that it not always necessarily always true. Given that your expenses are most likely to be higher than you expect and you are probably going to live longer than you think, it may not seem to be appropriate to have all your money in low-risk investments. Which is what about 50 percent of the people tend to think they should doing. There should be a mix of stocks and bonds, and you will need equity to grow your portfolio. You and your financial planner can decide what investment are right for you based on your risk tolerance and other factors. Just do not be surprised if your advised not to put the majority of your money in a savings account.Plan for tax implications: One of the things you may want to consider is minimization your assets for tax purposes a few years before you retire. For example, does it make sense to you to gradually do Roth-IRA conversions and take your 401k or Traditional Ira assets and to pay the taxes gradually without moving you into a higher tax bracket. To get a clear answer for this question, one of the main things you will want to take a look at is whether you expect your tax rate to be higher or lower during retirement. Also, another important consideration is your own views are about paying taxes. Some clients would like to pay the least amount of taxes possible. The feelings may even compel them to do things like move to Florida or another tax friendly state, just because of the tax implications. Tax planning can get very complex depending upon the type of assets you own, the value of your estate and many other factors. Accountants and financial planners can be a very valuable resourceto help you to see through the details of you specific situation.Thank you,John C. Verducci 111