This article is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA
1) Start Early
Do you want to increase your chances of retiring at a reasonable age? Start early. As The Rolling Stones said, “Time Is On My Side.” Well said. Don’t kick yourself for not starting earlier. You can’t turn the clock back. Just begin where you are now.
2) Live Beneath Your Means
This goes without saying. Which is why it needs to be said. To get to your retirement, you’re going to need to have some assets and income. Don’t fall into the trap of trying to keep up with the Joneses. Live beneath your means and get to the retirement finish line long before the Joneses.
Living beneath your means and saving is just the start. After you have started saving you’ll need to invest. Leaving all of your assets in cash likely won’t get you to where you want to go.
Don’t get me wrong. Cash and cash alternatives has its place in the portfolio. Cash and cash alternatives has recently been ‘rediscovered’ as an asset class. This is primarily due to all the media attention on the supposed bond bubble.
This is where the rubber meets the road. You’ll have to plan how to get to your destination. Be flexible however. Life can throw curveballs at you. Particularly when you’re not expecting them.
Learn to adjust and adapt. Even if this perhaps becomes more difficult as you age. Always a have Plan B to fall back on.
5) Play Defense
In sports terms, the four steps mentioned above are all about offense. Put some points up on the board. Just don’t forget about defense. As they say, defense wins ball games. Defense here is having the appropriate insurance. This coverage runs the gamut from homeowners, car, life and disability insurance. If you have dependents like a spouse or minor children, life insurance is a must.
Long story short, you need to manage your risk.
If you have followed the first five steps you will likely be in a position to share some of your resources. This could be with children, grandchildren or your favorite charity. If you are in this position, do it while you’re alive.
7) Enjoy The Ride
There is a clear destination here, retirement. With that said, you’ll need to enjoy the journey. You don’t want to spend your whole life waiting to get to ‘Someday Island’ or was it ‘Fantasy Island?’
Life is short. Make the best of it now.
There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rate rise, bond prices fall and when interest rates fall, bond prices generally rise.
The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the forgoing material is accurate or complete. Any opinions are those of Thomas F. Scanlon, CPA, CFP and not those necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Tax preparation and accounting services are provided by Borgida & Company, P.C., not as a service of Raymond James. You should discuss your tax or legal matters with the appropriate professional. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.