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Ten Years Out

Retirement Planning

The National Association of Personal Financial Advisors (www.napfa.org), the association of Fee-Only financial advisors, recently announced the results of a survey of its members as to their top retirement planning advice for pre-retirees.  The advice was structured for 5, 10 and 20 years out from retirement day.

To jumpstart Americans’ retirement planning, NAPFA asked its members to rank advice that represents the type of comprehensive planning that consumers should expect from a financial planner, including estate planning, investments, education funding, insurance and risk management, retirement planning and senior issues, among others. NAPFA-Registered Financial Advisors are CFP-certified, Fee-Only advisors that meet the highest education and ethics standards in the financial planning profession.

Last month I covered the 5 year out list.  I’ll cover the 20 year out list of recommendations next month.  Here are the recommendations for 10 years out from retirement.

  1. Be tax efficient with your investments. For example, you should defer as much of your salary as you can to your defined contribution plans.
  2. Save to an emergency fund and stay aware of your company’s financial situation. Companies are prone to reorganizations and layoffs, and older workers can be vulnerable.
  3. Brainstorm any “big ticket” financial commitments (caretaking for a family member, etc.) for the next 10 years and consider how these items might affect your ability to retire in your preferred timeframe.
  4. Take a hard look at any major debts that you have and develop a 10 year plan to eliminate them.
  5. Reallocate your portfolio based on your earnings timeline with a focus on performance, risk and expenses. Decide when – or if – you should shift to a more conservative asset allocation.
  6. Review what your tax obligations may be with your current investments and use tax optimization strategies to benefit your savings.
  7. Review your estate documents to ensure the language is still accurate. For example, are the named trustees and beneficiaries still alive and capable?
  8. Research when your stock-based compensation might expire and what stock awards you can retain after retirement.

If you are ten years out from retirement you should get started on this list right away.  Let us know if we can help.