McLEAN, Va. (12/23/14)--The end of the year is a timely opportunity for everyone to review financial goals or set new ones (USA Today
But especially if you're planning to retire in the next few years, it's important to spend some time reviewing finances. Here's advice that can help you prepare for success:
Develop a spending plan. It's essential to know what your expenses are going to be and to develop a spending plan. There are software programs and apps that can make this easier; your credit union might have its own savings app. You might think you'll have fewer expenses than during your working years, but savings can be more than offset by expenses for medical care and insurance.
Scrutinize health care costs. Don't just look at what Medicare will cover. Health care costs can affect retirement savings tremendously, and many retirees don't plan accordingly or else underestimate expenses.
Evaluate your financial relationships. Look at the relationships you have with a financial adviser, accountant, attorney, insurance agent--and financial institution. If you're not happy with a relationship, start researching different options. If you're not already a member of a credit union, join one. On top of better customer service, credit unions often have lower interest rates and fees.
Look at your 401(k). Review options for what you can do with this investment after you retire. Talk to a specialist in your human resources department as well as a financial planner for help making the best decision.
Review beneficiary designations. The end of year is a great time to review beneficiary designations. Marriage, divorce, births and deaths are all events that can change your family dynamic.
Start thinking about withdrawing from your nest egg. People spend a lot of time thinking about retirement savings but think less about retirement withdrawals. Have a plan in place for how much you think you'll need to withdraw each year and be realistic about it. Talk to a retirement specialist at your credit union to work out a plan that suits you and your lifestyle.
For related information, read "Protect Your Nest Egg From Nursing Home Expenses" in the Home & Family Finance Resource Center