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retirement goals

2022 Year-End Retirement Planning Checklist

by Maggie Leave a Comment

three women at the table-year-end retirement plan checklist

It is hard to believe that the new year 2023 is around the corner!

I do not know about you but I cannot wait! Financially, 2022 was a challenging year. According to Goldman Sachs, ‘2022 is likely to end up as the sixth-most volatile year since the Great Depression’. The volatile stock market and the daily reminders of high inflation and rising prices on everything will likely make you worried about the cost of your future retirement.

But the most important lesson I learned over the past years, including the global pandemic, is that there are rewards to being prepared. I truly believe that the year-end retirement planning checklist is a great way to look back at 2022 and make sure you are on the right path to achieve your retirement goals in 2023.

Below is a helpful list of 10 tasks to complete before 2022 comes to a close.

1. Create financial goals for the next year.

Do you know how much money you need to retire? What are you going to do about rising inflation? How is it going to affect your retirement income?

How much will it cost to help your parent’s long-term care needs, pay for your healthcare in retirement, or pay for the vacation you really want?

Maybe none of that applies to you today but you want to know how to project into the future. It is important that you know how much you will need to live the life you want in retirement.

What other financial goals do you have?

2. Set a target retirement age.

Retirement is the one common financial goal we all share. We all need to plan for the day when we can no longer work or are just ready to retire.

The target date is the year closest to the year you plan to retire. Age 65 used to be the magic number, the age at which most people retire. Yet that golden age has changed. Many people are working longer. Even though they may want to retire, it is not always possible because they do not have enough money to retire.

Take some time to set a realistic target retirement date. Based on your estimated retirement income and expenses, you can plan your own retirement strategy.

Looking at your target retirement date and retirement income, you can determine if you have enough money saved for the next 20 to 30 years. If it is not enough for a comfortable retirement, move the date and save more in your retirement funds.

Just remember that where you live and how much you can afford to spend in retirement will impact your retirement lifestyle.

How Do I Decide When Best to Retire?

3. Look at your spending.

The end of the year is a great time to look at your personal spending and see where your money is going. This year has been full of change and adjustment. With many people working remotely, there is a good chance your spending habits have changed as well.

How did you do this year? Have you tracked your spending against your budget? Did you get a full picture of your finances and know how much money you have saved (or not) in 2022?

If you have struggled this year, decide how to improve your financial situation for the next year. Are there debts you should be making a priority to pay off? Look at your budget and decide if there were parts that were difficult to stick to.

Look at your credit card and bank statements and see what expenses could be avoided this year. Then set up a budget for the next year and decide on how much money you need to save in 2023 to meet your retirement goals.

4. Get a clear picture of your spending in retirement.

Do you know how are you going to pay for your retirement years?

First, think about your current overall cost of living. Then, think about if you have enough income to sustain your current lifestyle in retirement?

Calculate how much is your nest egg.

When you are near retirement, it is important to know how much money you will need to live comfortably for the rest of your life.

If you still have no idea how much money you will need, look at your current expenses and then evaluate how they might change in the future.

When you retire, you do not need a lot of things that you did when you were working. Generally, the costs of commuting, take-out lunches, and business clothes will go down. However, you might start spending more money on travel, hobbies, and activities.

Calculating your nest egg is easy if you already have a budget and know how much you spend now. The next step is to get a clear picture of how it might change in the future based on your retirement lifestyle.

Retirement Budget in 5 Simple Steps

Another option to figure out how much money you need to retire is to replace 70 to 80 percent of your annual pre-retirement income. For example, if you earn $70,000 per year before retirement, you should expect to live off $49,000 to $56,000 per year.

5. Review the source of your retirement income.

In my year-end review, I always find time to look at our future retirement income.

I usually look at our current Social Security, retirement, and investment funds statements to get a clear picture of our potential retirement income. I wanted to make sure that we are on track to our retirement goals and have enough money to cover our living expenses when we stop working.

When you are working, you typically have a single employer and a single source of income – your salary. In retirement, everyone has different sources of income – Social Security, pension, part-time job, investments, and retirement savings (401k, IRA, Roth IRA, Roth 401k).

To make your assets last through the next 20 or 30 years, use the rule of thumb to withdraw 4 percent of your retirement money annually. For example, if you have $500,000 in retirement funds, you can spend roughly $20,000 ($500,000 x 0.04) per year when you retire. Add this number to your Social Security, pension, and other savings, and calculate if it is enough to support the retirement of your dreams.

Helpful Articles:

  • 3 Best Ways to Generate Retirement Income
  • What is the Source of Your Income in Retirement?
  • 5 Best Ways to Withdraw Money From Retirement Savings

6. Check your progress on paying down debt.

The end of the year is a great time to sit down and check your progress on paying down debt.

Ideally, you should be entering the retirement debt-free, but in the real world that is not always achievable. So, it may be okay for you to retire before you pay off your big debt like a mortgage, cars, and student loans.

Just make sure you understand the implications of retiring with debt because big withdrawals from retirement funds could push you into a higher tax bracket.

Yet, if you have several years before retirement, try to reduce your debt so you will have more money available for your lifestyle in retirement.

Pay off all credit cards and personal loan debt.

When it comes to debt, plan to pay off high-interest rates debt first. Credit card APRs have increased this year with the average rate around 19 percent. A credit card debt has become the most expensive debt for many people.

By reducing the existing debt and limiting new debt you can minimize the amount of retirement income that you will spend on interest payments. For example, if your monthly retirement budget includes a $350 car payment and a $700 credit card payment, you will obviously be able to spend $1,050 a month less than someone without those bills.

If you pay off a credit card that charges 19 percent interest, it’s like earning 19 percent on a risk-free investment.

Your mortgage.

Once, you paid off your credit card debt, start planning on paying off your mortgage. If you have a low-interest rate, you can plan to pay off the mortgage early by making “extra” mortgage payments each month.

With a mortgage paid off before retirement, you will have the extra money you need to travel in style or spoil your grandkids for years to come. Just remember that taking large withdrawals from your retirement accounts to pay off your mortgage could throw you into a higher tax bracket.

Helpful Article:

  • How to Pay Off Debt Before You Retire
  • Should I Pay off a Mortgage Before Retirement?

7. Review your savings progress.

typewriter - year-end retirement planning goals

Did you spend less money this year due to the fear of covid? Did you spend less money on eating out, vacations, or concerts? Did you buy less gas because you worked remotely?

If yes, stash those funds into retirement savings. If you are still working, try to boost your savings rate. It is never too late to increase the size of your nest egg. If you are in your early 50s, you still have close to 15 years of working to save for your retirement.

You should save at least 15 percent of your gross income in retirement accounts such as 401(k), IRA, Roth IRA, or Roth 401(k).

A key factor in any retirement plan is having enough savings to last for the next 20 to 30 years.

8. Check your readiness for unexpected expenses.

Another important key factor in any solid financial plan is having enough savings to fall back on during emergency. To be prepared, put it on your checklist to have two funds – a rainy-day fund and an emergency fund.

Typically, a rainy-day fund is smaller, up to $2,500 for smaller expenses. An emergency fund can be as much as 9 or 12 months of living expenses – $10,000 to $50,000 or more depending on your expenses.

Whichever way you build your financial cushion, be sure you do it. There is no better way to have peace of mind than knowing you have funds to cover expenses when you need them.

9. Review your asset allocation and simplify your portfolio.

As you are getting closer to retirement, it is important to have a clear and accurate picture of your complete investment portfolio.

If your portfolio is spread out among several investment companies, it will become difficult to keep track of all that information. Think about consolidating all your accounts in one place like Vanguard. So, you will get simplified reporting, low costs, and low fees.

The financial markets have fallen sharply this year. Take the opportunity to review your asset allocation and make sure your portfolio is diversified and invested for growth. You should have a mix of stocks, bonds, mutual funds, and other assets that fits your retirement goals.

It can be tempting to stay away from stocks to reduce the risk of losing money in your retirement funds. But stocks provide growth and investing for growth is important. If you retire at 65 and spend 20 years in retirement, you need to have enough growth in your portfolio to make money last that long.

Helpful Articles:

  • How to Set Up Your Retirement Portfolio
  • 5 Basic Rules of Investing for Women

10. Keep will and trusts up to date.

Another important part of your year-end retirement checklist is the status of your will and/ or revocable living trust.

Keep them up to date and make sure you have suitable executors, trustees, and guardians in place. Additionally, you will want to make sure your list of beneficiaries is up to date as well. If you have welcomed a grandchild to the family do not forget to add his/her name to the list. Also, if there has been a change in the family such as a marriage, divorce, or death, make sure to update your beneficiary list.

Like this post? Share it with others if it helped you!

Filed Under: Debt, Retirement Expenses, Retirement Income, Retirement Planning Tagged With: financial goals, pay off debt before retirement, retirement checklist, retirement goals

11 Tips for Fall Financial Checklist

by Maggie 4 Comments

laptop on the bed - fall financial checklist

Time flies. The hot summer months are over and there are only a few months left in this year. For me, early autumn is the best time of the year. The changing of leaves, the colorful local markets, the apple picking, and the comfort food.

Also, fall is a perfect time to take an inventory of finances and retirement planning goals. After spending money on summer travels and activities it is good to see what lies ahead and prepare for the following months.

Having a fall financial checklist will help you review your retirement savings, prepare your home and car for winter, get your investment portfolio in shape, and make the most of your money from the holiday season to your financial decisions.

While there are many more financial tasks to tackle, this list of 11 tips is a great way to start the final months of this year.

Here is my fall financial checklist with 11 helpful tips to improve your finances and get your home ready for winter.

Finances

1. Bump up your savings – Fall is a perfect time to look at your savings and emergency fund. It is never a bad idea to save more. If you depleted your savings, now is a good time to think about how to save more. Even $100 extra dollars a month ($1,200 a year) can make a big impact.

2. Look at your emergency fund – A solid emergency fund is helpful when financial troubles come your way. Most financial planners recommend having three to six’s months’ worth of living expenses to be tucked away.

The past two years of a global pandemic were hard on most of us. And if you have depleted your emergency fund, make it a financial goal to re-build it by the end of the year. One of the best things you can do is to make sure you have an emergency fund.

3. Check remaining FSA money – If your flexible spending account will expire by the end of this year, make sure you use it. Also, check FSA policies on how much money you can carry over to next year.

4. Review your retirement savings plan – Saving money in retirement accounts such as 401(k), IRA, Roth 401(k), and Roth IRA is smart way to enjoy some tax advantages and save for retirement.

But do you know if you are on track to meet your financial goals? Look at your retirement savings and see what can be done to save more. If your employment status has changed from employed to self-employed do not forget to enroll in self-employed retirement accounts SEP-IRA and maximize your contributions if you can.

Also, if you have recently changed the employer, decide if you want to roll over any old 401(k) funds from a previous employer to a new one. Additionally, try to increase your annual contribution to retirement accounts. Even a one percent increase every year will help you save more by the time you are retired.

5. Review your investments – Look at your investment portfolio. Things change all the time in the finance world. And it was no different in the last 12 months when the stock market was shifting during the global pandemic.

It is important to look at your portfolio and review where your investments are. Hence, fall is the best time to look at your investment portfolio and evaluate it. If you are 5 to 7 years away from retirement, make sure that you are not carrying too much risk or wasting your money on investments that are not generating a decent rate of return.

Also, make sure that your current portfolio meets your investment goals. If the market caused a shift in your portfolio, it needs to be corrected to maintain the diversification you originally planned.

6. Look at your company work benefits – During the fall many companies (including mine) send out enrollment information for the coming year’s benefits. Most companies’ work benefits start on January 1. Make sure you take some time to go through your current documents and understand any changes.

I always check the changes for my company benefits like FSA, 401(k), Roth 401(k), and health insurance. Keep in mind that even though your benefit choices worked for you this year, it does not mean they will next year. You can increase your contributions to retirement accounts and increase or reduce FSA funds. Finally, do not forget to submit the paperwork for a company-sponsored gym membership if it expires by the end of the year.

Moreover, you have to make sure that you have signed up for the proper health insurance plan for you and your family. Your health may have changed over the last year or your company will be changing the health insurance providers. It is important to keep an eye on these changes because you do not want to miss out on valuable insurance benefits.

7. Look at your retirement goals – If you are close to retirement, fall is an ideal time to start planning how you and your spouse will time your retirement. You may be already discussing when you should start claiming your hard-earned Social Security Benefits, when and how to enroll in Medicare program, and if you need to buy long-term care or life insurance.

8. Budget for the holiday season – The holiday season can be expensive with Halloween, Thanksgiving, Christmas, and New Year holidays coming up. We are not surprised anymore that many stores started putting up their Christmas displays in October. That is why fall is a perfect time to start budgeting for holiday spending.

calendar - fall financial checklist

If you start early and prepare your holiday budget ahead of time, it will help you save a lot of money by controlling your spending. Make a list of all your projected holiday expenses and start saving towards your goal. How much do you plan on spending on costumes, gifts, travel, activities, and entertainment? Putting aside even $50 or $100 each week will help you prepare for holiday spending.

Additionally, keep an eye for online sales and specials so you can get your gifts at more affordable prices. And if you are a creative person, start working on DIY gifts.

Home

9. Prepare your home for winter – Fall is a perfect time to prepare your home for winter. You can cut down on future bills knowing that your home is warm and functional during the cold months.

Usually, I like to go through my to-do list for home maintenance:

  • Check the boiler and service it if needed.
  • Call the cleaning company and sweep the chimney if needed.
  • Check the thermostat and readjust the temperature.
  • Check windows for drafts and cracks and remove A/C units.
  • Check the doors for drafts.
  • Clean out gutters after all leaves have fallen.
  • Remove the outdoor hose and turn off the water supply.
  • Collect fallen leaves, trim overgrown bushes, and plants.

10. Clean up your closet – Fall is a lovely time of the year when we are transitioning from summer to winter and getting ready for short days and cold weather. Also, it is my favorite time of the year to go through my closets.

Typically, I like to pull out all my winter clothes, scarves, gloves, and coats and sort them out. It is easy to sell the items you no longer need or use on sites like Craigslist or eBay. But I prefer to donate my fall and winter clothes that I did not wear last year. Also, I look at my summer stash and decide if I will be wearing it next year. If not, I will donate or toss it. Going through my closets help to see my options for mixing and matching clothes I already have instead of spending money on shopping for new outfits.

11. Get your car ready – Take a few steps to get your car ready before winter comes because with the change in seasons comes changes in driving conditions. We live in Massachusetts, where fall is the time of the year when the temperature drops at night, and we can see an increase in rain and even ice on the roads.

road covered with fall leaves - 11 tips for fall checklist

Here are fall car maintenance tips to keep you safe on the road:

  • Check and replace wiper blades if needed.
  • Check and change fluids in your car.
  • Check your car tires.

Also, don’t forget to clean the interior of your car and empty the trunk from the summer beach chairs and umbrellas.

In case you are looking for more fall financial tasks:

  • Plan for next year’s summer vacation and start saving money in your travel account.
  • Plan for future savings – lower your food bill, cut the cable TV.
  • Update your estate plan.
  • Check rates to reduce your payment for a home and car insurance.
  • Refinance your mortgage.
  • Make sure you have a financial and medical power of attorney in place and updated.

What is on your fall financial to-do list? Do you have other fall financial tips to share?

Related Content:

  • Checklist for Retirement Planning in Your 60s
  • Planning for Retirement in Your 50s
  • 6 Steps Guide to Organize Finances for Retirement
  • Checklist of Financial Goals for Baby Boomers

Like this article? Share it if it helped you!

Filed Under: Money Management, Retirement Planning Tagged With: financial checklist, financial inventory, retirement goals, tips for fall financial checklist

How to Create Retirement Lifestyle Goals

by Maggie Leave a Comment

type writer - coffee- create retirement lifestyle goals

Have you ever thought about what your retirement lifestyle would be like? How are you going to spend your days and weeks? Have you thought about creating your retirement lifestyle goals?

With retirement approaching, I have a wonderful vision of my new life. Sleeping late. Taking time to go through the day. Enjoying my morning coffee on the deck or just being lazy.

However, after years of a structured life and busy schedules, it will be hard to deal with endless hours. Going from working a full-time job to having no specific plans for each day might be exciting or depressing.

The lifestyles of today’s retirees are so different from the lifestyle of our parents. Today’s retirees are so active. They travel, volunteer, work part-time, play sports, or start new businesses. They like to spend time with family and friends and learn new technology or skills.

Related Post: 15 Ideas on What to Do When You Are Retired

Most future retirees think about financial goals of retirement – “Can I afford to retire?” “How much money do I need to have a secure retirement?” While financial security is important, it is only a small part of what it means to have a happy retirement.

If you are in your 50s or 60s, planning your retirement lifestyle is a smart idea. Look at your retirement as a perfect opportunity for new creations and new adventures because it can be the best time of your life.

Begin the planning process by creating your retirement lifestyle goals. You have been creating goals to achieve things throughout your life and planning a retirement lifestyle is no different. After all, having a goal means you know where you are going and what it takes to get there.

Here are some tips for helping you to plan your future lifestyle:

Envision your retirement lifestyle.

How do you envision your retirement? The point of answering this question is to define what will be important in your new life.

The minute you say goodbye to your coworkers your full retirement starts. What is next for you? You need to figure out what you would like to do for the next 20 or 30 years of your life.

Take a couple of minutes to ask yourself:

  • How will my life change when I retire?
  • What will I do with my time?
  • What do I like to do?
  • Who will I spend my time with?

Start by setting up big picture goals. What kind of things you would like to do when you retire. First, take a piece of paper and create all the goals you like even you are not sure you can afford them.

Then, group the goals between Wants (what you would like to have) and Wishes (what you wish or dream to have). Call it your retirement to-do list or bucket list.

Here are a few ideas of retirement lifestyle goals:

Travel – What are your travel goals? Do you want to travel every year? Or do you want to make one special trip? Where do you want to travel? Do you have a travel fund? Have you set up your travel budget?

Related Article: 5 Tips on How to Create a Travel Budget for Retirement

Related Article: Here’s How to Travel the World in Retirement

Celebration – Celebrating a special event can make a great goal. What special events do you look forward to celebrating? A family reunion, an anniversary, or a retirement party? Or maybe your daughter or son’s wedding coming up and you want to help to organize and pay for the wedding.

Downsizing – Moving out of your big house into a small rental apartment or condo can be a big lifestyle changing event. It will require a lot of planning such as selling the house, reorganizing your belongings, downsizing your vehicles, finding a new place to live, etc.

Related Article: 5 Tips on How to Downsize for Retirement

Related Article: Where Will You Live When You Retire?

Home improvement – Do you plan to continue living in your home for a long time? Do you have big plans to renovate your “old house” to be your dream home or to be more age-friendly?

Vacation home – It is a dream for many people to have a vacation home. Maybe now it is a good time for that vacation home you always wanted. Make it a retirement lifestyle goal and make it come true.

A sailboat, or a luxury car – Do you always wanted to have a sailboat or to drive a luxury car? Then go for it. Make it a lifestyle goal and be happy that you will be driving what you want.

Start a new business or new hobby – If you want to start a new business or develop a new hobby make it a goal and make it happened.

Health habits – Creating new health routines can make an excellent retirement lifestyle goal. Initially, you can start by going to the gym every morning and establishing better sleep routines. Next, you might decide to stop eating processed food, take cooking classes, and learn how to cook at home.

Social network – The professional network you built before retirement is not going to satisfy your social needs in retirement. When you stop working it will be hard to keep in touch with many of your colleagues. They will move on with their lives at work and you will move with your new retirement life. Make it a retirement lifestyle goal to develop new relationships and create your social network.

Volunteer – Many people plan to do some form of volunteering after they retire. Volunteering is a great way to make new friends, enjoy time with like-minded people and simply get out of the house.

Transform your big goals into small steps.

coffee shop - retirement liestyle goals

While we are working, we are accustomed to reaching the goals set by others. In retirement, we need to learn how to create the goals relating only to ourselves.

When you set a clear goal, it helps to get a sense of direction.

I like to write down my goals on a piece of paper. In the beginning, my goals come out as wishes. I would write on paper “I would like to write a book”. But then a few weeks later the wish becomes a goal, and I would put it on my agenda. Then I start taking small steps in that direction and slowly my wish becomes a well-designed plan.

If your big goal is to lose weight, start by breaking it into small steps. In the beginning, you can plan on walking 3 times a week. Then slowly you begin jogging 3 times a week. Next, you would look at your eating habits and maybe decide on cooking homemade meals or go vegan for a month.

Creating retirement lifestyle goals will help to transform your wishes into action plans.

Regardless of the goal, the results of this simple process can be powerful. It will help to clarify your direction, provide a feeling of control, and give you a sense of accomplishment.

Structure your days.

Recently I read several articles pointing out that you need to learn how to live slowly in retirement. The idea behind this approach is to enjoy every day instead of ticking things off your to-do list.

Take your time and think about what you want to accomplish by the end of the year. What do you want to do during the summer? And maybe what are your plans for the winter?

You can plan to learn many things – how to sew, how to restore furniture, how to bake, or cook a few new recipes. You can organize a get together event or a trip to visit friends next summer.

The key is to have an overall plan and then break it into smaller steps. Having a couple of things set in each category will help to manage your time.

Related Post: Get Ready for 5 Common Emotional Stages of Retirement

Have a sense of accomplishment.

a woman jumping over hills - creating lifestyle goals

I have started blogging in 2019. My first post was published on January 17th. I still remember this date clearly because it was a very important moment in my life. The idea of blogging came up as a wish instead of writing a book. I decided to do a little bit of research on this topic. Then after a year of researching, I found myself with a new blog and multiple social media accounts.

I have to admit I struggled to manage a full-time job and blogging as my new side hustle. Being a non-native English speaker adds to this challenge.

The technical part of blogging is the hardest one. I spent hours trying to set up my website and making it work. In addition to writing and editing blog posts, I have to deal with email marketing, sign-up forms, plug-ins, images, website maintenance, and more.

But I am not planning to stop blogging any time soon!

Every day I try to do better with time management. It gets easier with a routine. Once I break down the bigger goal into smaller pieces, it feels more achievable. And each time one of those steps got accomplished I can pat myself on the back.

Final Thoughts

With a little planning, your retirement lifestyle can be exactly what you imagine. Make your retirement years the best time of your life.

You can create your own active and happy retirement without a million dollars saved in your retirement funds. Retirement is not just about financial planning. It is about your time and how you spend it.

Have you ever thought about your retirement lifestyle goals? How can you break down those goals into manageable steps?

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Filed Under: Retirement, Retirement Living Tagged With: life in retirement, lifestyle goals, retirement goals, retirement lifestyle

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Hi, I'm Maggie. Welcome to Save, Invest & Retire! I am on a mission to help baby boomers learn how to save & invest smart. Follow me on detailed information about retirement planning, travels, and living the life of your dreams.

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