3 tips from a local financial planner if you want to retire in 10 years

From the standpoint of financial planning, a major milestone in life is when you’re 10 years from retirement. This is a time to take a full-scale look at where you stand, looking ahead to life after work.

Here are three action items if you want to retire in 10 years.

Get a formal retirement plan in place now

As you think ahead towards retirement, do you know what your income needs will be, or do you merely have a rough estimate? Do you know exactly how a market downturn would impact your retirement investments or hope for the best?

Having a formal retirement plan takes the guesswork away and doesn’t leave your retirement goals to chance. If you don’t have a written retirement plan in place, don’t hesitate to reach out to your financial planner so they can work with you in creating one.

One key factor to have them look at is how much exposure to risk your investments have. Be sure to ask the following questions:

1. Are my savings carrying too much or too little risk based on my retirement timeline?

2. If I’m behind on my retirement plan, are there ways I can get back on track without taking on more risk?

Begin Reducing Your Debt

Another valuable tip as you plan for retirement is to shed excess debt. This may involve implementing better spending habits now for the sake of your retirement future.

Doing so has a two-fold benefit. First, shedding excess debt prevents you from carrying liabilities that eat away your income in the early and best years of retirement. Second, the money you save by reducing debt now can be strategically invested to grow for your future goals.

Start solidifying what your retirement goals are

When you begin thinking about retirement, what are some of the first images that pop into your head? Do you see yourself on a boat taking the children and grandchildren out for a day on Lake Winnipesaukee? Now, what if you don’t have that boat nor even have it in the budget to pay for it, especially while you’re trying to follow tip #2?

Here is where the non-financial aspects of retirement planning intersect with the financial aspects. For example, with a formal retirement plan in place which optimizes your Social Security benefits and creates a strategic retirement income plan, you could save $10,000 per year in taxes alone. That’s $10,000 per year you didn’t include in your budget. That’s $10,000 per year you didn’t have to work overtime to save. That’s your new boat–one major retirement goal achieved.

Whether in your case it actually is a new boat, or it’s travel to more, get a Laconia Country Club membership, buy a second home, etc., the above example illustrates the value of forming a solid idea of what you want to do in your retirement years and how having a formal retirement plan plays into realizing those goals.

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This article was contributed by Brandon Archibald, from The Ivy League Advisory Group (theivyag.com), a local retirement planning firm based out of Tilton, NH.