Making Adjustments Prior to Retirement

Now that you have planned your goals for retirement, you may realize you need to make investment adjustments to meet these goals.

What do I do if my income does not cover my anticipated expenses?

There are many ways to address this, but here are a few examples of what could be done to improve your retirement picture:

1.Adjust some of your variable expenses downward (travel less or closer to home, pursue less expensive means of entertainment, etc.).

2.Continue working for a few more years

3.Assume increased risk by increasing the initial withdrawal percentage

4.Consider working part-time for awhile, or if already considering part-time work, maybe work a few more hours a week

5.Tap your home equity

What are the cost differences between retiring now, and waiting a few years?

If you are faced with a retirement picture that is not what you had hoped, working just a few more years, if you are able, can significantly alter this picture.  It can mean the difference between running out of money early and standing a chance of living comfortably later into your retirement.  You will have a few more years to save, a few more years for your assets to grow, and potentially a larger Social Security benefit.

What if I am not planning on retiring for a few years?

You will need to assume that your projected retirement expenses will rise with inflation between now and the time you retire.  A standard assumption of 3% annual inflation is a good approximation; of course, some expenses (such as health care) tend to rise at higher rates.

You may also need to assume that your investments will continue to grow and that you will continue to add to your savings in those few years.  It is well publicized that a reasonable assumption for growth of a portfolio that consists of 60% stocks and 40% fixed income is 7% or 8% a year, however, it is really important to keep in mind that when you are looking at only a “a few years,” there is a much higher probability of ending up with less money in the end than if you are looking at ten or twenty years.  You may want to consider this in your estimates, or possibly adjust your asset allocation if you fee you may be invested too aggressively.

All investment advisory services and fiduciary services are provided through Conrad Siegel Investment Advisors, Inc. (“CSIA”), a fee-for-service investment adviser registered with the U.S. Securities and Exchange Commission which operates in a fiduciary capacity for its clients. Investing in securities involves the potential for gains and the risk of loss and past performance may not be indicative of future results. Any testimonials do not refer, directly or indirectly, to CSIA or its investment advice, analysis or other advisory services.