7 January 2014 0 Comments

The Retirement Planning Process

retirement planningIt may be true that it is never too early to start planning for retirement, but let’s face it—there are a lot of other things that are at the fore of your financial plans at young ages.  Retirement is a long ways off and easy to defer for later planning.  Still, here are a few steps that I considered on my way to retirement, and well after it now at age 78.  And the planning goes on because full retirement is always a few steps away, tax laws change and priorities adjust.   I have a great life.  Here are some of the things I and many of my peers did along the way to get to this point:

  • Always participate in a 401k plan up to your employer’s matching contribution.  Somehow find the money to do it.
  • Don’t use your qualified retirement plan such as 401k’s and IRA’s as a bank account, borrowing against them prior to retirement.  Consider it sacred money for your retirement!
  • Purchase term life insurance to protect your family during their growing-up years.
  • If you own your home obtain a line of credit in addition to your principal mortgage and use it judicially for large purchases such as cars so the interest is low and can be tax deducted.
  • Avoid high interest credit cards.  Pay off the balance each month.
  • By the time you reach your 50’s work Long Term Care Insurance into your budget.
  • As you reach age 55 determine how much of your term insurance you want to keep beyond the end of its current duration and look into a permanent policy for the amount you want to keep.

This last point may be tough to determine, but your term insurance will get way too expensive if you expect to keep it much longer.  With this in mind, I’ll be covering a “wait and see” concept of how to make the right moves as you make up your mind while keeping your current premiums in check.

Next,“Wait and See”—a  concept to follow when you’re not sure about life insurance as you near your retirement years.

Leave a Reply