Investment Strategies

Investment Planning Check List

Check List at Age 30

Pre-Retirement Planning Guidelines
  • Continue (or start) saving
    • Maximum tax advantaged retirement accounts like IRAs, 403(b)s and 401(k)s. Take advantage of time and the power of compounding to grow your money.
      • Employer-sponsored retirement plans If your employer offers a retirement plan like a 401(k) or a 403(b), sign up. If you’re already participating, make sure you’re taking full advantage of employer matching – otherwise you are losing out on “free money.”
      • Individual Retirement Accounts (IRAs) Take advantage of Tax Deferred Growth and use the power of compounding with the many IRA tools available. Choose one that’s right for you.
    • Target to save at least 10% of your income – automatically – every month
      • First decide which accounts you’ll use – there are several options to consider.
      • Contribute enough to your employer’s retirement plan to take advantage of the company match, then contribute the additional amount to a Roth IRA to build tax-free savings for retirement.
      • If you don’t have access to a 401(k) and if contributing the maximum allowable amount to an IRA doesn’t get you to 10% of your income, set up a taxable account such as a mutual fund or brokerage account.
      • Set up an automatic transfer of the amount you’ve chosen to save in an IRA.
    • Consider adding bonuses, tax refunds, or other lump sum payments to your retirement savings
      • Setting aside financial windfalls can help accelerate your retirement savings. You’ll thank yourself later.
    • Continue (or start) building an emergency fund
  • Watch your spending
    • Keep debt down
      • Lower monthly payments and high-interest debt to pay down debt faster. As you reduce your debt, consider using the available cash to invest more for retirement and other goals.
  • Refine your plan
    • Write down your retirement goals and outline a plan.
    • Check in on your asset allocation . . . are you on target?

Check List at 40

Pre-Retirement Planning Guidelines
  • Refine and adjust your plan
    • Review your retirement plan
      • Make sure you are saving enough to retire when you choose.
      • Confirm that your investments and asset allocation strategy is aligned with your goals.
    • Protect yourself and your loved ones
      • Check that your beneficiaries on retirement accounts are up to date.
      • Make sure you create and update your Estate Plan.
      • Determine if you have appropriate levels of life, homeowners and other insurance to protect your family from the unexpected.
  • Prioritize saving for retirement
    • 401(k)s and IRAs: Take full advantage of these tax advantaged choices
      • If you have access to an employer plan, contribute at least as much as your employer will match.
      • Even better, contribute the maximum allowable amount.
      • Consider contributing the maximum allowed in your IRA every year.
        • Look into spousal IRAs as a way to increase your tax-benefitted savings.
        • Determine the imp ace of maximizing your IRA contraptions.
        • Consider using direct deposit to put all or part of your tax refund directly into an IRA – you can ask the IR to do this as part of your tax return.
        • Find out whether converting a traditional IRA into a Roth IR would benefit you.
  • Protect your retirement savings from short-term needs
    • Strengthen your emergency fund
      • Consider increasing your emergency fund to six months’ income.
      • Don’t worry about funding it all at once – set a goal for yourself and work towards it over time.
    • Tackle high interest debt
      • Lower your monthly interest payments to pay down debt faster.

Check List at 50

Pre-Retirement Planning Guidelines
  • Save more
    • “Catch-up” by contributing more to your IRA and 401(k).
      • You are now allowed extra “catch-up” contributions to both IRAs and 401(k)s.
      • Set up an automatic transfer to your IRA, or increase the amount you’re already auto-transferring.
    • Find out how long your savings will last with our easy-to-use calculator.
    • Don’t assume that IRA or 401(k) contributions are enough.
      • Depending on your retirement goals, you might need to be saving more than 20% of your income while in your 50s.
      • 401(k) and IRA contribution limits could mean you need to save extra in taxable accounts like a brokerage account.
    • Do your best to avoid taking early cash distributions.
      • Be aware that withdrawing cash from your retirement accounts before age 55 or 59 1/2 (depending on the plan) can carry not only higher taxes, but also early withdrawal penalties.
    • Consider adding bonuses, tax refunds, or other lump sum payments to your retirement savings.
    • Maintain your emergency fund of three to six month’s income.
  • Review and update your retirement plan
    • Are you on track to reach your retirement goals? Make sure you know how much you should be saving.
    • Ensure your investment and asset allocation strategy is aligned with your goals.
  • Protect yourself from the unexpected
    • Consider additional life insurance protection to provide for loved ones.
    • Learn about long-term care insurance.
    • Protect what might be your most important retirement asset – your home. Make sure your home is sufficiently covered with homeowner’s insurance.
  • Develop your income plan
    In your fifties, you can be more realistic about when you want to retire, how much income you’ll need, and what your current retirement savings are projected to be once you reach retirement age. Identify your sources of income for retirement.
    • Assess what your monthly expenses will be.
    • Understand the risks. For example.
      • Do you know how longevity can impact your plan? Have you planned for healthcare? How will inflation impact your portfolio?
    • Create your retirement paycheck. Learn how to create a withdrawal strategy that’s right for you.
    • Understand the role guaranteed income* with annuities can play in helping you meet essential expenses in retirement.

Check List at 60

Pre-Retirement Planning Guidelines
  • Review and update your retirement plan
    Make sure you are on track and determine how much you need to live the lifestyle you plan for retirement.
    • Check to see if you have enough to retire when you want to, or whether you should be saving more.
    • Make sure you have an appropriate investment and asset allocation strategy to reach your goals.
    • Be sure you have an established and updated income plan that details how you’ll pay yourself in retirement. Are you protected against outliving your assets?
  • Develop your income plan
    • Create or review a withdrawal strategy designed to provide you with the income you need in retirement.
      • Even if i you are a few years from retirement, this can be a critical piece to help you determine if you are ready to retire. Following an effective income plan for retirement is as important as saving for it.
    • Ask yourself questions such as: How will you pay for essential expenses like food or housing? How much will you need for discretionary spending such as travel or entertainment? How will you address inflation?
    • Understand the role guaranteed income* with annuities can play in your retirement income plan.
    • Simplify your finances to better track your assets and manage your spending.
      • Consolidate your retirement savings into one IRA.
  • Keep saving
    • “Catch up” by contributing more to your IRA and 401(k)
      • Take advantage of the allowed catch-up contributions to IRAs and 401(k)s
      • Set up an automatic transfer to your IRA or increase the amount you’ve already set up on auto-transfer.
    • Don’t make the mistake of assuming that IRA or 401(k) contributions are enough
      • Depending on your retirement goals, you might need to be saving more than 20% of your income while in your 60s.
      • IRA contribution limits could mean you need to save extra in taxable accounts like a brokerage account.
    • Consider adding bonuses, tax refunds, or other lump sum payments to your retirement savings.
    • Maintain your emergency fund of six months’ income.
  • Protect yourself from the unexpected
    • Consider additional life insurance protection to provide for your loved ones.
    • Learn about long-term care insurance.
    • Protect what might be your most important retirement asset – your home. Make sure your home is sufficiently covered with homeowner’s insurance.
    • Estimate and add the cost of insurance to what you’ll spend in retirement.

OUR MISSION STATEMENT

Michigan Retirement Specialists provides an educational approach to pre-retirement planning, helping families achieve peace-of-mind as they undergo the retirement planning process.  We educate, advise, plan and manage to help our client’s achieve their dreams.