How To Start Retirement Planning

In Episode 92 of the Wealthy After 40 podcast, I kick off a four-part series on how to start planning for retirement. The first episode details the exact strategies and skills for a solid foundation. Key topics include tracking expenses, building an emergency fund, and contributing to retirement savings. 

Part Two, Episode 94, will then look at risk tolerance, asset allocation, financial planning, and managing debt in retirement.

00:44 Introducing the Retirement Series

05:49 The Importance of Tracking Expenses

08:37 Building Financial Stability

11:48 Contributing to Retirement Savings

Click HERE for Full Transcript of Episode

Welcome to the podcast and a happy new year to all of you. I'm so glad you're here and hope you'll be with me for a while. I'm excited for the up and coming things I've got planned. No really direction change. I am adding. More guest interviews, just like I said last episode, those will be released every Friday. And then with that move, you get me every single week. I hope you're excited to really get planning for retirement. Is this your year to get serious? I hope so. It doesn't matter how close you are, how far away you are. Unless you get serious about planning, it won't happen. I have created a four part series, today is part one, to really help you start understanding the areas that you need to build skills in, to build knowledge in, to create a career. successful retirement. And that definition of successful retirement is different for everybody. As I said that, hopefully whatever popped into your mind, start thinking about that, start drilling into that, start creating that. That is your spark of light to get going. This series was built around my retirement readiness checklist. I've added to it. If you have not downloaded it, go do it. It's got a second part to it. I didn't replace it. I just added to it and basically took the same things and placed them into how many years? If you're this many years away, if you're this many years away, and what you should be focused on and learning. If you've stayed on my email list since downloading that checklist, you will have seen that free. Maybe you didn't see it. Go double check your email. It should be there. If not, please reach out. If you haven't downloaded it yet, go grab it. It's a wonderful resource to kind of give you support and ideas on the areas that you need. to plan for and create planning for. And as you know, like I've said, it's more than just money. Part one through three is about the money. Part four isn't going to be, but really it's not just about that savings number. And that is really such an abstract number that we're telling everybody they need 1 million or 2 million. Because not everybody has. the same life, we don't have the same income right now. Why do we need to all strive for that same dollar amount? It's really ambiguous. I think there needs to be more clarity in it. I think society, I'm just going to use that loosely because I don't know who it should be and I'm trying to do my part, really needs to start building this education around Finances, first of all, and then retirement and really helping people build the skills that they need to create whatever they want. There's a lot of stuff out there that we need to navigate, that we do, and we all do it with the same level of understanding. Some are able to do better, some never, you know, get over a certain skill level, and really there's a lot of potential for everyone. for listening. So that is a reason for this series. But in addition to that, this four part series is going to be kind of an overview. I'm going to give you some action steps. I'm going to share with you some stories, just like I always have, but I'm not going to get into the nitty gritty. The granular steps and mindset and habits and skills. I will be doing that Over on the Retirement Vault, my private podcast, I will be taking the series into a 12 part series, so more bite sized, but with more action. I hope you'll join me over there and really start diving into planning, especially if this is a year Not that you want to retire, but if you do, I hope you will start this, but hopefully you're, you know, within five to ten years away with retirement. Regardless of how much you've got saved, regardless how much you have done, like, This is it. This series and then the other series inside the private podcast is going to help you really create a retirement plan that you need. There was a survey done by, I don't remember the company of all of the generations that were headed into retirement. Now, some people in these generations have retired, but those who have not retired and Gen Xers. which is mostly who's here, have only, only 30 percent of us have a retirement plan. 30%. It really can be, Such a stretch to think about retirement planning. Well, where do I need to go? What do I need to do? That's a lot. I don't have the time, and I get it. It's all there. this series is for you. If you like any one of these, Join me over in the Retirement Vault. We'll go deeper. I promise. We'll have a lot more fun over there. If you love numbers, if you want to be a numbers nerd, join me over there. We are going to really get into the details. Alright, today's topic is building the foundation for retirement. If you're 10 years away from retirement, You really want to set this foundation solidly, and it's more than just saving your money. And I will get to that in just a minute. But the thing that you should be doing, the skill that you should be mastering, is tracking expenses. I have talked about this a lot, and I've had several clients come to me recently You know, they need a system to help them track more easily, you know, being able to see this flow so that they can transition to retirement so much more easily. As we've been doing that, tracking expenses is more than just tracking expenses. We think about it and we're like, okay, well, I need to make sure I don't overspend. And that's the first thing you think of with tracking expenses. And why yes, that's great, that is not the only thing. Tracking expenses should be building an awareness within us of what our expenses are. What is the makeup of them? Where is our money going? So that we're building this knowledge that we could answer fairly easily. Or, more accurately, if we go right to it, without too much effort, and be like, my bills cost me this, my fun costs me this, I am putting this much into savings. And being able to take that information from tracking your expenses is the goal. That is the goal. To really be able to define what is it that you're spending your money on. Where, why, you know, all of these things. So that when you get ready and when you're planning for retirement, you know what will follow you. What that amount's going to be. What changes you think, Oh crap, maybe I need to make some changes. This is just part of the process. As you head into tracking expenses, it's a foundational effort at this point. It is not that you're going to know tomorrow. all of these answers. It is going to take probably six months at best to start having this rhythm, understanding, and knowing what's going to be expected from your money. Now six months is still, six months is, six months is still a little shy. On that learning curve, as we head into the second thing that you need to be focusing on being about 10 years out from retirement, and that is building an emergency fund. I am going to use that term through this episode, but it really is. A matter of creating financial stability, seeing what expenses come around once a year, three times a year, you know, four times a year. Not very often those unexpected, oh, these are the things I also spend my money on. These are the things I need to be prepared for. I was in a retirement forum. There was a question asked by an individual. How how am I supposed to buy a car in retirement? Well, the same way that you buy a car now. So then he details how he's got a budget. Going on. And he says, I've got my bills and then I've got my fun stuff. And I'm like, wow, you've got a glaring hole and it is this building financial stability. It is this emergency fund that is a glaring hole in a lot of situations. And with that, that was why he didn't know how he was going to buy a car in retirement. I create, and I help my clients create, An auto fund. Our amounts are different because our needs are different, but we're putting money into this fund every single month. So if I need to buy a new car, that fund might give me a down payment. Has, you know, have my repairs and all of that replacements not been too expensive, I might be able to purchase a vehicle outright. But the third scenario is I've got X amount of dollars going towards an auto fund that can go towards an auto payment even into retirement. This was started pre retirement. This is what I help my clients learn pre retirement. And then it just keeps flowing and supporting. you're able to navigate those needs that just arise out of nowhere. Mm, out of nowhere, sometimes yes, sometimes no. Really building that financial stability is key. I had two clients who They've saved enough for retirement, but this was a glaring hole. We've helped them close it off. You know, that question in that forum, that was also the glaring hole. This is, I think the biggest area that individuals lack from, you know, obviously there's not a lot of financial education out there. And even if there is, they forget to talk about this thing. Remember, we're going to dive deeper into that in the private podcast. I don't want to get into all of the nitty gritties here, but really building that. I've talked about that before in several episodes. You can go back and look at those as well. The third thing that you need to be focusing on is contributing to retirement savings. We've just talked about financial stability, which are savings. These are funds that are probably going to be spent fairly quickly. Not immediate, but probably within a year or five years. But your retirement contributions are going to be somewhere hopefully growing. Hopefully you've got them into, maybe you have an employer funded retirement account. If you have a match, and I've said this before, and I'm not going to miss out on not saying it again. If you have a match, do that minimum. You've got to get started. I know a lot of people are like, well, am I going to have enough money? Is that enough that I can save? Okay. If you are not saving, you're not going to have enough. If you are saving, you're going to be a lot closer. And there's a lot you can do. You're 10 years away. Save, but also in that saving journey, building that skill, building that habit, continue to increase those savings. Continue to try and put as much as you can towards that. In the upcoming episodes, we'll talk about that a little bit more, but really getting with your expenses can then help you find some savings. Sometimes you can do the reverse. If you've heard me talk about my 1 percent savings challenge is if you are contributing, let's say you're contributing 3 percent because your employer matches three. All right, you've got 3%. I want you to raise it to four, regardless if your retirement or if your employer is going to match it or not, let's raise it to four this month. Okay. Then next month, you're going to go to five. It's 1%. It's very small. So you're going to kind of like do a. Forced savings here. And then all of a sudden, because you are tracking expenses. Remember that was habit number one. We talked about, you're like, Ooh, we're getting close. Okay. Then pause, leave it. Whether you were able to make it to seven, eight, maybe nine. I did this on my journey. I love a good challenge. If you're, you know, somebody that's like, yes, I am a little bit competitive and that really sparks something for you, that is going to be the method for you to use. Maybe you're somebody who needs a little more surety. Then what you're going to do is you're going to save an amount somewhere you can see it for, you know, three, four, five, maybe even six months and make sure this amount is continually coming through and that you don't need it. And then once you have that, then you can start contributing that to savings. It's just, there's a lot of scarcity beliefs. movements, you know, things that hinder us because we're like, Ooh, but what if I needed that? Okay, then let's define and going back to tracking our expenses. As you do that, you're defining where your money is going. The tracking should be a proactive aspect of what you're trying to do with your money. It's not restrictive. It's not saying, Oh, you overspent. Okay. Although it's nice to know that. But it's like, okay, alright. This is always flowing to bills. Yep, my bills look great. Yep, I'm paying them, matching them. It's great. Nothing skawampus is happening. Okay, over here we've got groceries. We've got fuel. We're eating out. Okay, yep. We can manage that level of eating out. That's what we're doing. Not, oh, well, I wanted to eat out, oh, I'm just going to go do it anyways. No, it becomes this relationship in tracking. Tracking really has a negative connotation, if you think about it. You know, we track animals, if you're a hunter. We track our children to keep tabs on them. Not that that's bad, but we track, we track, we track. And yet, what if we're tracking, or just keeping track of? And having the information service very positively, helping us be better, helping us create more. I love tracking my expenses. I love knowing them exactly, especially when there's a desire for change that I want to happen, that I want to have happen sooner than later. It is through this tracking effort that I'm like, okay, yep, we're going to track it, we're going to track it, you know. And I've been tracking and staying within budget, but now I have a desire and a need that I want to track it and be able to start shifting money somewhere else. Really lean into that. Really explore that and start, you know, understanding how things can build that for you, create that for you. I had a client who was not tracking anything. She hadn't found a system that worked. And so she was like, I really need help with that, but then I need help. So, looking at it and understanding what the numbers mean. And myself, I probably don't do as well as I should because I just, it comes natural for me. I forget that it's not natural for people. Looking at a number, looking at a number four in a column for some people is like, Oh, and for me, I can quickly associate it with something and know what it means and give it a whole lot more perspective. And so being able to learn that. is key. And I would say that is crucial. Working with her, we helped her create a system that supported her in the areas that she need. She could quickly view what was going on. And really, really lean into a new belief of tracking. Really start exploring how it can positively serve you as you're moving closer to retirement. It's not to penalize. It's not to take away. It's just to bring about awareness and clarity and a full understanding of who you are with money. That's all I have for part one, building the foundation for retirement, And if you want to dive deeper into those three things, and a few other skills necessary for creating that foundation, join me in the Retirement Vault, where additional episodes that dive deeper into these subjects will give you action steps, More skills, more detailed information to create the retirement plan you need. Plus members will get exclusive emails about bonuses, specials, office hours, and special trainings. It's going to be a wonderful resource for creating your retirement plan. And I hope you will join all of us over there in the retirement vault. That concludes today's episode, part one of the Retirement Series, Building Your Foundation. I hope you'll join me next week as we dive into part two, where we'll talk about risk tolerance, asset allocation, how to work with financial planners, and debt in retirement. Stay tuned for that next week. And don't forget Friday's guest interview will also drop. Let me know if you need any support, please reach out any of the links down in the show notes with any of your questions, but ideally join me over in the retirement vault where you can submit your question to be answered within its own episode. Thank you for being here and we'll see you next week.