Spring Clean Your Finances for Retirement Planning Success

Spring Clean Your Finances for Retirement Planning Success

by A. Scott White, CFP®, ChFC, CLU

Spring typically brings flowers in our yards, cleaning in our houses, and taxes. For most of us, our finances could also use a yearly cleaning to allow for growth and ensure current financial planning supports our road map to retirement. Below are some activities we suggest to ensure your current planning sets you up for the life you want lead in retirement.

1. Assess your financial condition

Do things need to be cleaned up before you look forward? How is your current credit ratio, does your budget allow for savings and investments monthly or quarterly, and is your retirement funded appropriately at this point? If you don’t know the answers to these questions, this is where you need to begin your cleaning and organizing process. If you have answers and like those answers, move to step 2.

2. Set goals

What type of life do you want to live in retirement? Do you want to travel the U.S. in an RV, play golf daily, or pursue hobbies? What financial support level does that lifestyle require? Setting your financial retirement goal is personal and subjective to what your dreams are for your future. Make sure you write these goals down and revisit them often.

3. Develop a strategy designed to meet those goals

Every goal deserves a well-planned strategy. What steps need to be in place to reach your goals? How will you ensure that you stay on course?

4. Implement the strategy

If a well-crafted, thoughtful plan has been created, this step can be easy.

5. Regularly review the results and adjust as needed

Just like cleaning your house, finances and financial plans must be reviewed and revised on a regular basis to ensure your goals are still in sight. We recommend a review of this plan on a yearly basis.

We suggest these five steps be completed with the guidance of a CERTIFIED FINANCIAL PLANNER™ professional who will help you create an Investment Policy Statement – a clear, written document articulating the investment objectives and policies applicable to you, the investor, and your investment portfolio. The final version of the IPS should reflect your current status and investment philosophy as defined with your financial advisor.

There are a few important pieces of an Investment Policy Statement outside of the financial and planning components. One is finding a financial planning partner who will listen to your wishes and use their knowledge to build and implement a plan to reach your retirement dreams. The second is ensuring that the IPS is reviewed and adjusted on a regular basis and tweaked to continuously point toward the goals you set.

You may want to include your finances as part of your annual spring cleaning process. Please let us know if we can help you with this, or any part of your financial planning needs.