Not always received favorably, you’ll recall my prior post advocating a Nevertire plan vs. a Retire plan (http://wallfinancial.blogspot.com/2010/09/nevertiree-vs-retiree.html). No matter your opinion on that, planning for the future regardless of whether you want no-work, or passion-work run very similar parallels for the majority of the time people maintain careers. When you are 30, for example, your habits of saving for future goals really don’t hinge on whether or not you want to stop working altogether at age 65 or start leading bike tours at REI.
So whether your dream is to retire completely, partially, or not at all, here is a Nevertire/Retire Checklist that might be helpful.
When you are in your 30s:
- Build an emergency fund. Do you have at least 6 months worth of cash?
- If your employer offers a 401(k)-type savings plan, use it!
- As your salary increases, so should your 401(k) contribution.
- Look for other tax-advantaged ways to save.
- Understand risk, but think growth-focus.
When you are in your 40s:
- Be disciplined with how you pay for things (debt vs. cash) and boost the emergency fund.
- Get real. This is when many get their first shock saying, “I really need THAT much to retire?” Better to know now than later.
- Keep it simple. If you have 2 old 401(k) accounts, 3 IRAs, 2 brokerage accounts, consolidate what you can to make it easier to follow.
- Are you allocated correctly for your risk tolerance, age, goals, etc? Many folks need some serious rebalancing.
When you are in your 50s:
- Get real (again). Keep a close eye on progress toward goals. What needs to change? The sooner you act, the better.
- Get an idea for how you will derive income in retirement. Do you specifically how it is going to work? Understand the details.
- Are you allocated correctly? Might be a time to reposition your investments and rebalance again.
When you are in your 60s:
- Most folks have a specific plan, so general advice probably isn’t wise. All actions need to support your plan.
