“Life is unpredictable and there’s no way to know exactly what you’ll need as life circumstances change,” said Mary Orstein, Manager of Financial Planning for PNC Investments. “But building a financial plan and adjusting as you get closer to retirement can put you in the best position to live the way you want to.”
A long day at work or a weekend catching up on emails might lead many of us to dream about an early retirement. For others, health or unforeseen circumstances can accelerate retirement timelines. However, early or right on time, establishing a retirement plan during your working years can help put you on a comfortable path financially whenever it comes time to retire.
Planning for retirement can feel daunting, but a comprehensive financial plan provides a strong foundation by helping you define your goals, time horizon, tolerance for risk and more.
Here are a few questions a financial advisor can help you answer about planning for retirement.
Do I have enough saved?
While “enough” is subjective to your unique situation, mapping your current spending can help determine what may be sufficient in retirement. You’ll want to plan for current expenses like food, housing and transportation that will remain, while considering that other necessities like healthcare or insurance may increase over time. Hobbies or travel that you may have more time for in retirement may also require a portion of your budget.
Your plan can help determine necessary spending and how to budget for the luxuries you’ll want to enjoy. At the same time, it allows you to review your probability of success while illustrating the potential impact of various decisions real-time. A comprehensive plan can be updated regularly to help address changes in your personal circumstances, market conditions, portfolio performance and more.
When can I retire?
Just as there is no “one-size-fits-all” for spending in retirement, there is no universal right time to retire. Working longer allows for more time to maximize your retirement assets and pay down debt. It may also help increase your Social Security benefit. Retiring early may have lifestyle benefits but require earlier distributions from your retirement accounts. You’ll also need to consider that you may not have the luxury of choosing exactly when you retire.
Your plan could weigh your retirement timing goals, with your unique financial situation – taking into account different income streams like retirement plans, Social Security, pensions and inheritances - and be setup to help you make the necessary adjustments, so you’re financially ready whenever you retire.
Planning for Volatility
Markets fluctuate, but when they become extremely volatile you may find yourself feeling the drops in the pit of your stomach. Successful investing always comes back to your long-term goals, so think through your financial plan independent of what the market is doing. Have your goals or timeframes changed? If an investment is down, don't view its performance in a vacuum. If your circumstances have shifted, it may be time to talk to your financial advisor about making changes, but that's true in any market.
Overall, regular reviews of your plan with a financial advisor can help inform adjustments to your spending, investment allocation or even how long you plan to work.
“How much you spend and when you leave the workforce, are factors you can influence. How the stock market behaves, is a different story,” Orstein said. “Fortunately, you can control the decision to enlist the help of a financial advisor to help prepare for a financially secure retirement. And that can make all the difference.”
While the opportunity retirement brings may be exciting, planning for it financially can be intimidating. A PNC Investments Financial Advisor can help you determine whether you’re on track to fund the retirement lifestyle you envision. Call us at 855-PNC-INVEST.
