What You Need Now to Plan Your Retirement So You Don't Just Sit Around Writing Retirement Limericks

Retirement Planning is More Than Browsing the Web to Find Webcasts for Financial Planner Professionals.

To make it financially during your retirement, you need more than webcasts and financial planner sayings. In fact, you must go beyond the TRowePrice retirement planner tool and asking your friends about the best gold mutual funds. And if you think you can fund your retirement by hocking your 14k gold college ring, you’re in for a shock. Instead, you must begin by assessing exactly where you are today by making a list of all of your assets (that’s the stuff you own) and all of your liabilities (the things you owe… like credit card debt, car loans, mortgages, etc.), and listing all of your income and outflows.

Retired woman doing yogaCredit: http://www.freedigitalphotos.net/images/view_photog.php?photogid=1499

After two decades as an investment advisor, I often put together webcasts for financial planner professionals to instruct them how to help clients figure out their current financial situation. Surprisingly, it’s not that easy. I would love it if clients came into my office with a spreadsheet that listed all of their financials. But alas, I must often extract the information bit by bit in order to help them. Here are some of the questions I teach financial planners to ask their clients (and I ask, too). If you’re on your way to see your financial planner, you should prepare answers. That will make your meeting much more efficient:

  1. How much do you earn?
  2. Is that number gross or net, meaning before or after taxes?
  3. Does your salary normally increase with inflation, and do you expect that to continue?
  4. How secure is your job?
  5. What age do you plan to stop working?
  6. Do you have any health issues that might affect your ability to work?
  7. Which insurances do you have? Life, health, disability, etc.?
  8. What kind of pension do you have at work?
  9. What percentage of your salary goes into your pension?
  10. Does your employer match it?
  11. Are you self-employed?
  12. What will you get from social security one day?
  13. Do you have any pensions from previous jobs?
  14. Do you have any other sorts of special income, such as distributions from trusts, gifts you receive regularly, royalties?
  15. Are you expecting to receive any inheritances?
  16. Do you plan to sell any valuables like gold, jewelry, art, antiques?
  17. What is your tax bracket? (Federal, State, local)
  18. Which savings plans do you have, and how are they invested?
  19. How much do you keep in checking accounts, money market funds, CDs?
  20. Do you have any stocks, bonds, or mutual funds? If yes, which types?
  21. Real estate? Mortgages?
  22. How much do you spend every month?
  23. Do you owe anyone any money? If so, how much?
  24. Does anyone owe you money? When will he pay?
  25. What are your basic living expenses?
  26. What education expenses do you anticipate?
  27. What other expenses will you have related to your children?
  28. Do you have any special needs situations?
  29. Are you comfortable having risk in your portfolio?
Financial planningCredit: http://www.freedigitalphotos.net/images/view_photog.php?photogid=721


As I am writing this list, I think I could go on and on. But let’s stop here, since I don’t want to frighten you away from making a plan. Also, I put together a list of important documents that you need to prepare, and you can read that article here: When Your Retirement Years Should be Your Golden Years. Whether your goals for retirement are touring all of the 5-star hotels in Europe, finding the best place to retire, or if you’re just interested in finding out if US savings bonds have been cashed so that you don’t accidentally try to cash them in again to pay your rent in the retirement home, you need to start with a financial snapshot. That is the first step in the financial planning process.


Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.