Whether you recently retired or are planning to in the months ahead, you may be wondering how current financial and economic conditions may impact your plans. Do you need to adjust your spending to accommodate inflation or rising interest rates? How would a market correction impact your ability to meet your long-term goals? Should you wait to retire until inflation abates, or the markets become less volatile? These are all good questions as you approach one of life’s most impactful milestones—the transition from work to retirement.
In a recent study, 60% of working Americans say inflation has adversely affected their personal finances, leading many to consider delaying retirement. According to the survey:1
- 25% have felt a major impact
- 36% have reduced their savings
- 21% have reduced their retirement savings
- 25% say they will need to delay their retirement
Before changing or delaying your plans for retirement, sit down with your Mike Mead to:
- Understand your income sources - Cash flow is at the very heart of financial security. For most people, paid work provides the income needed to support your lifestyle until you retire. Once you retire, your paycheck is replaced by one or more sources, such as Social Security benefits, a pension, retirement plan assets, personal savings, and/or real estate income. However, you need a plan for how you will take income in retirement to help ensure it lasts as long as you need it.
- Develop an income strategy – A structured approach to drawing income in retirement begins with understanding the purpose of each account you own. That enables you to draw down on your assets in the most tax-efficient manner while helping to preserve and grow any long-term assets used to generate additional income throughout your life in retirement.
- Review or update your financial plan - If you don’t have a plan, now is the time to put one in place. A comprehensive plan will not only help you determine if you’re ready to retire but whether you need to update your current strategy based on your goals or prevailing market and economic conditions. If you have questions about how long your money may last, the planning process can instill confidence that you’re on track to meet your goals, or help you evaluate potential tradeoffs, such as working a year or two longer than planned or reprioritizing certain goals, so you can retire on your schedule.
To learn more about making confident decisions about when to retire, let’s schedule a time to talk.
1 BMO Real Financial Progress Index, May 2022