By Thomas Britt
Retirement is just around the corner—HOORAY! Or maybe it’s still a few years down the road. Regardless, preparing for retirement is no easy task. There are a few common mistakes pre-retirees make, but that can be avoided through proper planning.
The word “budget” has some negative connotations as it seems restrictive or daunting to have to track how we spend money. However, knowing what is coming in and out of your accounts every month is vital to prepare for retirement.
Budgeting helps you to see what you are spending each month and to plan accordingly for the future. You cannot invest or save an adequate amount of money for retirement if you don’t know what you’ll need each month.
Not Saving or Investing for Retirement
While budgeting your dollars and monthly income is a big part of the process, 45% of Americans say that they have saved nothing for retirement. (1)
Investing is crucial if you want to live comfortably in retirement, and your investment strategy will depend on several factors, including personal financial objectives. A financial planner can help you hash out those objectives and implement strategies to assist you in reaching your goals.
Not Adjusting Your Asset Allocation
Once you’ve started investing for retirement, periodically you will need to adjust your asset allocation. Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an individual’s goals, risk tolerance, and investment horizon. (2)
This means that the older you get, the less risky you will want your investments to be so that you don’t lose a large portion of your assets if something were to happen to the economy (like COVID-19) or otherwise.
Not Having a Lifestyle Plan
Retirement is an accomplishment many hope to achieve someday. But have you thought about how different it will be in retirement than during your working years? How are you going to spend your time and your money when you’re retired?
You will need to think about these things when planning your retirement. After all, it’s not just about having enough money or assets to support you, it’s about having fun too!
If you have any questions about your retirement plans, our team at Benchmark Wealth Management is ready to assist. Please call 860.434.6890 or email me at email@example.com to arrange a consultation.
Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.
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(2) Asset Allocation