Spring is in the air and that means it’s time for spring cleaning. But wait! Before you pick up that dustpan, we would love for you to give a thought to your financial spring cleaning first.
What do finances and spring cleaning have to do with each other? If you’re preparing for retirement, the answer is “A lot!”
These days, ‘spring cleaning’ is often used as a metaphor for “getting your affairs in order”. As you can imagine, getting your retirement affairs in order is critical if you intend to retire when and how you want. There are many things to keep track of, many tasks to do, and many decisions to make.
So how do you begin? Well, when many people do their spring cleaning, they make a checklist. They list the supplies they’ll need, which rooms to clean, what to mop, vacuum, dust, or organize… it’s the most efficient way to clean. we suggest doing the same for your finances. Here is a quick Spring Cleaning Checklist to help you better prepare for retirement:
Pre-Retirement Spring Cleaning Checklist
- Contribute the maximum amount to your IRA
- An IRA is a valuable way to save for retirement in a simple, tax-advantaged way.
- Currently, the annual IRA contribution limit is $6,500 for folks 50 years old and older.1
- Review your 401(k) and increase your contributions (if necessary)
- How has your 401k performed in the past year?
- Do you understand how your money is being invested and why?
- Are you contributing enough to take full advantage of any employer matching?
- Review your existing expenses
- Which expenses are likely to continue after retirement?
- What expenses can you remove right now?
- This is a good way to find extra ways to save for retirement and it will make your life a lot simpler once retirement comes.
- Make sure you know where your estate planning documents are
- You should have a copy of your will, power of attorney, advance medical directives, letter of instructions, and other documents in a secure but easily accessible place.
- Make sure your loved ones know where these documents are kept.
- Review your insurance policies
- Are there any potential gaps?
- For example, Critical Illness and Long Term Care insurance are two types of policies many people don’t have but are often extremely valuable for retirees.
But most of all…
- Make a list of your top retirement concerns
- Is there anything you are confused or nervous about?
- Start getting the answers you need now instead of waiting until you’re already retired.
- Remember, you want to enjoy your golden years, not stress over them!
- Make a list of any new goals or dreams you have for retirement
- What will it take to achieve or afford them?
- Are you on track?
- If you’re not sure, it’s time to start planning.
Spring cleaning is never the most fun thing in the world, but it’s often one of the most beneficial. Just as you probably enjoy living in a clean, organized home, you’ll enjoy the peace of mind that comes with getting your finances in order. Trust us: if there’s one thing we’ve learned in all our years of helping people plan for retirement, it’s that a little organization today can make for a much happier retirement tomorrow.
Of course, if you need help with any of the items on this checklist, please let us know. If you don’t have an IRA, we can help you set one up. If you aren’t sure how your 401k is performing, we’d be happy to help you analyze it. If there’s an estate planning document you don’t have, we can connect you with someone who can help. And, if you ever have any questions or concerns about retirement, chances are good that we have the answers.
From all of us at True Wealth, we wish you and yours a happy spring – and happy spring cleaning!