Preparing for Retirement Series: Serious Checkup (10 Years from Retirement)
Now that you are only a decade away from retirement, it’s time to assess: are you where you need to be? Revisit that picture you have of yourself in retirement. Are you on track to reach those financial goals to be traveling or volunteering? If you are married, is your spouse on the same page? This is the best time to compare notes on your visions and date of retirement.
Another key point is a portfolio and savings checkup. If you have built up a nice nest egg, then this decade is also your re-balancing decade. Your portfolio may be built for more risk than you’re willing to take at this point. It’s important to think about how much risk you can take without a lot of time to wait out market drops. This is the most important time to be saving money as you’re likely near the peak of your earning years and may be empty nesters. Uncle Sam allows you to make a catch-up contribution (which means contribute more) in tax-qualified retirement accounts past the age of 50.
Crunch your numbers! Start your calculations by estimating what your annual expenses will likely be in retirement. One thing you do not want to bring to your retirement party is debt. Debt can mean pushing off retirement a couple years or not traveling as much. These expenses may decrease if, say, your mortgage will be paid off. You should start chipping away at high interest rate debt such as credit cards or personal loans. But be realistic; spending on certain things such as travel may go up (and don’t forget that inflation will take its toll).
Our own Katie Junk wrote a fantastic describe where you should mentally be whether retirement is 40 years away or just 1. Each of those milestones has been posted as it’s own blog and posted right here on our website: SweeneyMichel.com/blog or read below on the road to retirement:
Check it out and let us know what you think!