After years of systematically saving for what once looked like a faraway retirement, youre beginning to look ahead.
Youre reviewing your401(k)and otherretirement accounts, and youre getting ready to live the dream.
Many Americans dont have nearly enough retirement money set aside.
You should appreciate your success.
But dont start kicking back just yet.
As much as youve planned and worked to get to this point, theres still much to do.
So your decisions matter even more at this stage.
The first three focus on accumulating wealth.
The next two stages focus on harvesting what youve managed to accumulate.
No Interest Til Almost 2027?
But a good rule of thumb is five years in advance of your actual retirement.
At this phase, youll want to start thinking differently about your investment choices.
For instance, chances are you will want your portfolio to be less volatile.
That will help ensure a predictable, comfortable fifth stage, which is, of course, retirement.
Did you know?
Planning is a continual exercise of asking what if?
That time has come.
Your up-to-date plan will help you understand your next steps.
Good financial advisors tend to be expensive, but the wrong advice is even more costly.
For example:withdrawing money from your retirement account too earlycan lead to costly penalties.
you’re able to save money by only hiring an advisor when you need one.
Youll want to ratchet back risk so a few bear markets over the years wont decimate your savings.
Youre going to be retired for a long time!
There can be a lot of paperwork and expense involved in a rollover in exchange for very little value.
And if its done wrong, you could trigger costly tax consequences.
Even the most wonderful employers can have outdated retirement plans.
Retirement-plan laws and investment products have evolved over the years.
Its better to know now than be caught short when you need your investments the most.
He is an adjunct professor of finance at Wayne State University in Michigan.
