No. 6: Monitor your plan
Your plan isn't a one-time exercise that you put on autopilot. It needs to be regularly monitored at scheduled intervals, preferably quarterly, to review planned versus actual achievement of various financial and nonfinancial milestones.
Timely changes need to be made to your plan to reflect new opportunities and changes in your personal and financial situation, goals, and health situation, as well as changes in the economic environment, tax laws, and other government regulations.
No. 7: Share your plan
Don't keep your plan a secret. If you want to achieve your goals, you need to be accountable for them. At a minimum, you should develop and monitor your plan with your spouse or significant other as applicable.
Your plan should reflect each of your respective unique goals as well as your shared goals. Given the fact that everyone should retire on his/her terms, planning for different potential retirement dates needs to also be considered whenever couples are involved.
No. 8: Work with a team of experienced professionals
Retirement planning isn't for do-it-yourselfers. It's extremely complicated with a lot of moving parts that need to be analyzed and coordinated on an continuing basis. One mistake can be extremely costly and potentially devastating to an otherwise sound plan.
Using your goals and your visualization of a successful retirement, your retirement income should be planned, managed, and protected by a team of professionals. Your team should be led by a retirement income planner with experience and training in financial and nonfinancial matters unique to retirees. It should also include a CPA, investment adviser, insurance agents, and an estate attorney whenever these services aren't provided by your retirement income planner.
Working with a team of professionals will enhance accountability and the likelihood of retiring on your terms.
No. 9: Embrace change
Retirement income planning is quite different from traditional retirement planning where asset accumulation is the primary objective.
Two important differences are (1) the types of strategies that are used and (2) the issues that need to be addressed. Things like income conversion and retirement plan distribution strategies and long-term care, Social Security, and Medicare planning techniques require specialized knowledge, expertise, and experience.
In order to retire on your terms and take advantage of various opportunities, it's important that you be receptive to exploring and implementing investment, insurance, tax, and other financial planning ideas and strategies that may have previously been foreign to you, including income longevity strategies where appropriate.
No. 10: Recognize that retirement planning doesn't retire when you do
Retirement planning, once it's initiated, is a lifelong commitment. Even if you follow my third recommendation and start retirement asset and income planning 30 and 20 years, respectively, in advance of retirement, you shouldn't stop doing retirement planning when you retire.
This would be like planting a fruit tree and never watering it. Retiring on your terms is a lifelong endeavor. Like the fruit tree, it requires continuing nourishment that must adapt to changes in one's environment.
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1) Pay off your debts as fast as you possibly can. If this means living in a crappy studio apartment and eating ramen everyday for a couple of years, do it. If you want to buy a car, get a reliable beater. Forget about buying a house until your debts are paid off.
2) Once you are out of debt, stay out of debt. The only exception to this rule is a vehicle and a house. If you want to get a nicer car, buy used and be able to pay it off in a year or 2.
3) If you are going to stay in the same spot for at least 10 years, buy a house, preferably with at least a little bit of usable land. An acre is good, 5 acres is better. Take the amount you are pre-approved for and cut it in half - that's how much you should spend on a house. Come to the table with at least 20% down and make a couple of extra mortgage payments every year. If you're going to be transferred or relocate every 5 years, forget about buying a house and rent instead.
4) Develop multiple revenue streams. Do contract work. Start a business on the side. Invest in a business as a silent partner. Raise chickens, breed dogs or grow apples. Build websites. Buy and sell antiques. Acquire rental property. Sell something that generates residual income. Learn to play the currency markets or trade stocks. Do whatever you can to generate income from multiple sources.
5) Grow these multiple revenue streams to the point that they generate enough consistent and reliable cash flow to replace your current income.
6) Make as much as you can. Save as much as you can. Give away as much as you can.
7) Retire!- the sooner, the better. Be sure you understand that "retirement" doesn't necessarily mean you stop working, it just means having the freedom to do what you want to do, when you want to do it.
Don't be foolish and fall into the trap of trying to measure your wealth by the value of your assets. Markets change. Valuations fluctuate. Instead, measure your wealth by the amount of cash flow your assets consistently generate.
Retirement can bring JOY and TEARS.
JOY..... don't have to get up out of your warm bed in WINTER and battle the elements to go to work...........don't have to deal with the BOSS and co-workers...........don' have to meet DEAD LINES for projects.............don't have to do end of year EVALUATIONS.
TEARS......... if no family close by, no one to talk to...............no distraction from every day living, BOREDOM........ .TV becomes boring, until you become addicted. not enough money to go places, although you have the time............... days are longer, than when you were working, because of boredom..........don't want to volunteer because I have to be at a certain place at a certain time, just as though I am working. .....etc........etc...
What's that? Oh!..... retired you say.
Never mind then!
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