Investing as a Pre-Retiree - FAQ

The time just before entering retirement can be extremely stressful. From putting in extra hours at work to finalizing any last-minute strategies, there's a lot to do at this point in your life, and you probably have a lot of questions. Below, the investment specialists at SII Investments have compiled a few frequently asked questions and responses to help guide you in the right direction to a happy, stress-free retirement. In the end, however, it's important that you speak with one of our registered representatives to get a better understanding of where you're at financially. Hopefully, you've been planning for this time in your life for a while now, and are relatively prepared for what's to come. If you have any questions or concerns not addressed in this pre-retiree FAQ page, please contact our broker/dealer.

When will I be able to retire comfortably?

Investing throughout retirement can prove extremely beneficial to diversifying and making sure your nest egg lasts a lifetime. Even with years of financial planning and sound investment decisions behind you, it's hard not to worry whether you've saved enough. You never want to worry about cash running low or having to return to the workforce down the road. While there is always risk involved in investments, continuing to invest throughout retirement may increase your peace of mind to enjoy your retirement and focus on the most important things to you at this stage.

How do I find a balance between risk and security?

Everyone has their own unique point at which that they'll be able to retire, and there's no magic age, dollars saved or perfect situation for everyone. This question should be one that's addressed by your financial advisor. If you're still unsure as to when you'll be able to comfortably retire, it's crucial that you speak with one of SII's registered representatives. They'll assess your unique situation, provide you with investment and financial planning recommendations, and get you on the right track as quickly as possible.

Do I have time to adjust my retirement plan? If so, how?

As you grow closer to the typical retirement age, there shouldn't be too many surprises. After all, you've been working for this time in your life for many, many years. There are certainly minor changes that you can make to your retirement plan, but ultimately, you should be pretty well set on your path. Below are a few adjustments that you can make to your retirement plan, both in terms of income and expenses.

  • Downsize your home: for some, scaling down to a less expensive, lower maintenance home can be beneficial. This allows you to reduce certain expenses such as utilities, mortgage payments, and property taxes, have less property to maintain, and increase your investment income. Overall, downsizing your home might be a great last step in climbing up the ladder to a comfortable retirement.
  • Prioritizing expenditures: If you have adult children, you may want to consider slowly encouraging them to make payments on their own, especially if they've already graduated or gone on to a job, military, etc. Other expenses to consider reducing or eliminating include extra non-essential items in your life. By cutting out items that you can live without, you'll be able to put more money away for retirement.
  • Delay retirement: If necessary, adding extra years of work will allow for more earnings to be put into savings and could potentially increase the amount you receive monthly from Social Security. If you're worried about reaching your goals in the time you've allotted yourself, and you're willing to work extra years, it may be wise to consider a delay.
  • Phased retirement: If you're worried about making ends meet after retirement, consider working afterwards. From taking up endless free time to increasing your income, adding a second career to your life can be beneficial.

Since retirement is coming up quickly, it's crucial that you meet with a trusted financial advisor to make sure that your asset allocation is correct, that you're putting away enough, and that you don't have any unexpected investment dilemmas.

Are there any tools I can use to help plan and prepare for retirement?

Although you're presumptively pretty far along in the retirement planning and preparing process, checking online tools from trusted resources such as FINRA and socialsecurity.gov can be extremely beneficial at any stage of life. Below are a few of those tools:

  • Retirement calculator: The retirement calculator is a great way to get a hypothetical approximation of how much you'll have saved up by the time you're ready to retire. To calculate this number, the tool will ask that you put in personal financial information, as well as your projected retirement age.
  • Retirement estimator: Similar to the calculator, the retirement estimator will give a general assumption of how much you will have accrued by the time you're ready to retire. This tool calculates its estimates based on records of your social security earnings.
  • Required minimum distribution calculator: This calculator will determine your Required Minimum Distribution from a traditional 401(k) or IRA.

Please note that these tools are designed for informative and educational purposes, and should in no way replace the expertise and knowledge of consulting with a financial advisor or investment professional.

If you have any unanswered investment questions or concerns, don't hesitate to contact our broker/dealer. At this stage of your life, it's more important than ever to be on track financially for retirement.