Approaching or Living in Retirement

Although retirement is commonly viewed as an ending, the truth is that for an increasing number of people, it’s a beginning, too. For some, it’s the beginning of the life of leisure they’ve always envisioned; for others, a longed-for life of travel and adventure. And for yet others, the end of one career marks the beginning of another.

Whether yours is a traditional or a working retirement, the transition to it is the perfect time to review your finances.

Assess your financial resources and establish a budget

Ideally, you (and your spouse, if you’re married) have already projected a retirement income, based on your accumulated assets. Because retirement marks an end to the asset-accumulation phase of your life, your focus now turns to income generation from those assets. You may wish to consider a professional asset management program, with the objective of continuing to grow your assets, providing income from your investments, and managing investment risk.

Still, transitioning to a retirement income that may be less than your working income can be a challenge. Prudent budgeting and disciplined spending can make that transition smoother.

Manage debt wisely

Yes, debt management is just as important when you’re 65 as it was when you were 25. With so much you’ve always wanted to do, and the time now to do it, you might be tempted to splurge on a home renovation, whirlwind vacation, new car or other major expense. Consider the impact on your retirement savings and taxes if you withdraw assets, and consider the impact that repaying principal and interest will have on your retirement budget, should you purchase on credit.

Re-assess your insurance needs

Although you may be covered by Medicare or private health insurance, these may not cover you in the event you need health care or personal care for an extended period of time. Discuss the options for paying for care services with your family and Financial Advisor.

Plan for the distribution of your estate

Without proper estate planning, your assets may be distributed after your death according to federal and state laws rather than your directions. Preparing a will, developing a strategy to “gift” assets to family or institutions, appointing an executor of the estate (and a guardian for minor children), and establishing trusts can help ensure that your wishes are carried out and your family is provided for in the event of your death.

Talk to a qualified Financial Advisor

Through knowledgeable advice and a personalized financial plan, a First Command Financial Advisor can help you as you begin your financial journey — with solutions for building up your financial resources, reducing debt, managing financial risk and planning for your future. To learn more, contact a trusted First Command Financial Advisor today.

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