Retirement Planning Blog

Answers to Frequently Asked Questions Regarding Financial Planning

Saving for Retirement - Mastering Retirement's 10 Steps

Posted by Mark Snyder | Jun 29, 2017 3:23:22 PM

Should You Have a ‘Money Date’?

             Largely thanks to medical advances many can expect to live a relatively long life. This makes being financially prepared for a long retirement important. It’s never too late to meet with a financial advisor to take steps to help make your golden years fulfilling ones.

            There is a growing concern that a minimum, annual savings rate of 10% will be required of most Americans who anticipate working at least 40 years. A full two-thirds of retirement plan participants understand that they should be saving at least 10% of their salary to stay on track, and 45% believe they need to save 15% or more. However, only 4 in 10 are saving as much as they think is necessary, and among those who are saving less than what they think they need, the majority (68%) would need to increase savings by 5% or more to be on track according to the 2017 Lincoln Retirement Power® Participant Study, by Lincoln Financial Group (

         The more competing priorities someone has the less they contribute towards retirement. Only 36% of individuals with eight or more competing priorities are contributing 10% or more to their retirement, but of those who have two or fewer priorities fighting for a share of their wallets, 59% are contributing at least 10% and 40% are putting 15% or more away for retirement. Student loan debt has a major impact on retirement savings. Six out of ten people with student loan debt said it is keeping them from saving more according to the survey.

When Can You Retire?

          By determining a target retirement age, you will have a goal to work toward and progress to monitor. You can also begin to answer other questions, such as: “At what age should I start collecting Social Security benefits?” Consider that collecting Social Security benefits before full retirement age can permanently reduce the size of those benefits. Delaying benefits can maximize Social Security income.

Are We the Problem?

          We tend to prepare for costs that we can anticipate. Most of us do not foresee the amount of debt we may carry into retirement and other unexpected expenses, such as long-term care and various health-related costs. For a secure financial future it’s critical to maximize income as well as find additional retirement income sources.

The 10 Retirement Steps:

  1. Work as a team. You should know how much each of you is putting into your retirement accounts, whether that amounts to the maximum allowable contributions and what your respective vesting schedules are. You also need to know how much money each of you will get from Social Security and what any pension benefits may be.
  2. Address key financial decisions. Have a candid conversation to openly discuss the basics and share financial experiences, hopes and fears with your spouse. Consider a “money date” to take turns answering such questions as: What’s your biggest financial fear? How did your parents manage money? What’s your biggest short-term financial goal?
  3. Be open and honest. Learn how your partner feels about money and what is their future vision. Agree to build a retirement fund together and learn the effects of taxes, inflation and procrastination.
  4. Review life insurance policies each year or two. Know the current value of your home, the size of your mortgage, the interest rate on it and how much equity is in your home.
  5. Invest in retirement plans and IRA accounts. Know the nature and size of each of your investments (including cash, checking accounts, savings accounts, money-market accounts, CDs, treasury bills, savings bonds, mutual funds, annuities, stocks and bonds, real estate investments, and collectibles such as stamps, coins, artwork etc.) and know where the relevant paperwork is kept.
  6. Be sure to follow the ever-changing retirement/investment rules.
  7. Plan for long-term care. This can become a terrible financial and emotional burden on a family.
  8. Build your retirement basket three ways. Pay yourself first. Contribute as much as possible to a pretax retirement account. Know where your retirement dollars are and what they’re earning.
  9. Build a security basket consisting of a cash reserve, wills and trusts, life insurance, and health and disability insurance.
  10. Build your dream basket, too. List your dreams and start working toward them – the sooner the better.

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Topics: Retirement Planning

Written by Mark Snyder