How Do I Know If I Can Retire? A 6-Point Readiness Check

 Last week we talked about fears and limiting beliefs that may be holding us back from retirement planning. If you haven't listened to that episode, go give it a listen and it'll hopefully unfreeze you, help you, be ready to start taking those steps to retirement. This week we're talking about how to assess your readiness for retirement. You know, retirement planning, unless you work with a financial planner, and even then, really the focus is about that number, we talked about that in last episode and yes, we need to try and reach that number, but there is so much more to planning for retirement than just money. I've believed that that's been a motto of mine and we really need to better understand. What, what and how to prepare for retirement to make that number that we're trying to achieve more realistic. In this episode, I'm going to help you better understand what the areas are, what the things are that you need to think about in planning for retirement. But we're gonna walk you through. The concepts of readiness. How do you know if you're ready? Well, there's some areas that certain things need to happen, not with perfection. Definitely we're still human, but really going through an understanding of all of these areas, what it takes, kind of the roadmap. As we talk about this, you know, this will be okay, do this one, then do this one, then do this. And there's statements within each that kind of say, I've done all of these things. What we're going to do is just review that. It is a scorecard that I'm using in my bootcamp. I will share more about my bootcamp if you haven't listened to the last episode and how this fits in with that three day experience. To kick off area one of retirement readiness, it's your financial starting point. Within this area, you need to know your current household income. It's surprising how many people don't really know that. The second thing, I know my exact expenses, and I'm going to use exact loosely because I track them and I understand where my money goes each month. You have this level of awareness of your spending, what it takes to run your household. I talked about that last week, and just really understanding your expenses. S statement number three. I know how much debt I owe and I have a plan to pay it off the last, I have a savings amount that can support any unexpected expense. These four areas give you an idea of where to start and how to solve that last one with a savings amount, your emergency fund as. Some people call it that can really support those expenses. And these are not even emergencies. Those expenses that are not the monthly that kind of come sporadically or they do have a. They do have a system that they're showing up maybe annually, quarterly, bi-annually, whatever, but that you have an amount set aside that is not having you take, dig into your credit card. This is a huge one and most clients I work with when they come to me. debt's paid off. They're looking to just support a tracking system or get a better leaning in of their current finances. This is a gaping hole, and this is something that is crucial. I think this is the tipping point for most people to find themselves, quote further in debt or to fill not prepared. Really diving into having this sinking fund amount set aside. sinking fund, emergency fund set aside to cover the what ifs. You're gonna still have this in retirement, so while you might feel really good about those other statements, it may be that area that you need to really hone in on and get really comfortable with. But this, that's how you kind of assess your readiness in each of these seven areas. The next area is to shape your retirement future. You have a clear vision of what you want to do every day in retirement. It's more than just traveling or playing golf with the buddies. You've got to understand the every day. The second statement I've considered, where I'll live, what I'll do, and how I'll spend my time. I have defined my purpose for retirement. We have a purpose going to work. Whether it's a challenging position we're in, we enjoy the company we have. It's, whatever that purpose is, we now need to find something to support our retirement purpose. What is that? It can be anything. It can be anything. And last, within this retirement future is I have a general retirement date in Mind General, probably the year. And you've heard, if you've heard. Or been a listener for a while. You've heard me say how that was really hard for me to choose the month, the day, not necessarily the year or so, but just to under, just to think like in five years. If you're thinking about 2030 or 2035 that you've already considered that, that's shaping your retirement future. Area number three is that you're mapping out or you have mapped out your retirement expenses. You have considered all potential expenses that will impact your retirement. That's why we need the vision. What are we doing daily? What are we doing for great experiences? What are we doing seasonally? These can have an expense and you know it will impact our retirement budget. Consider those. You've estimated those costs and you now have created an estimated retirement budget. That is how you begin to map out your retirement expenses. This is how you get closer to creating that FI number accuracy. Area number four, stack your savings for retirement. Last episode we talked about not being a consistent saver, so in this area for readiness, you're gonna be consistently saving for retirement. You are also going to have a plan. To increase that savings amount as often and as much as possible. This may be coming from wage increases, this may come from debt payoff. You know that you have that plan of, okay, this time, or if this happens, then I will increase my retirement savings and continue to do that as much and as often as possible. And the last section, or the last thing for this area is that you contribute to retirement accounts. First for employer match. Regardless the type of retirement account, we want to get that match first, and then as you feel best fits your retirement strategy, you are saving into other retirement accounts. Really stacking your savings, really exploring the different types of retirement accounts, investment accounts, those types of things will help you, increase that savings in many multiple ways. Area number five, plan your retirement paycheck. I know that sounds kind of funny, but we still need to have a paycheck and how it's coming in. Within this, you're going to understand your expected income sources. Where's your income coming in from retirement? You know, is it just investments? Do you have a pension and when, or if you have social security, how does that fit into creating that paycheck? Secondly, with that, I, I know when and how to maximize my social security benefits, knowing that early withdraw on age or, the full maximum benefit, what that looks like and how to maximize that. And the last one in this is that you have a strategy to withdraw from retirement savings in the tax efficient way. Definitely a financial planner to support you on this, however. Gaining an understanding of first the tax brackets. If you are going to draw down and it's going to bump you into that, what would that mean? That's what that statement means of a strategy to kind of put you in what income level, what taxes are you paying? how does that all work? You're going to have tax deferred, you're gonna have taxable income. And just understanding that. I would, really, really strongly suggest understanding that the best you can before going in and, getting support from a financial planner. Area number six, smart debt strategies. You have a plan to pay off high interest debt before retirement. I highly suggest not heading into retirement without. Credit card debt, that high interest debt. Really make sure that you have that plan to get that paid off. Secondly, I know how much debt, if any, 'cause we've talked about some people not wanting to pay off their mortgage and other people do. But knowing how much debt you will carry into retirement and how it will impact your budget. That's going to be a factor in that FI number, so make sure you understand that. And then the last thing in this area is that you understand how you're going to manage that mortgage in retirement, if you're taking it with you, and also how you're going to manage debt. How are you going to purchase a vehicle? How are you going to, extend yourself with credit in different ways. Just have a plan. Just be prepared. Make sure it is thought through and not just that is your default. The last area. Expand your financial know-how. The first six areas are specific and helping you get into the basics of retirement readiness. Your expand, your financial knowhow is going to be where you are going to hit your personal situations. Within here, you're going to stay informed about personal finance, meaning you're understanding financial literacy more you're, you're striving to learn more, educate yourself, and understand retirement strategies, how they can work, how they will affect you if they're for you or not. Second is I understand how investment taxes and market changes can affect my retirement. Being prepared for that, understanding those things and just, getting that knowledge so that you can make those really good decisions. And that comes into the third one, which I feel confident making financial decisions and working with a financial professional. Even if you are working with a financial professional, you should be the one making the decisions. They're somebody that is an expert in different areas. They should be giving you options, educating you, supporting you. So really here, expanding your financial know-how to increase your knowledge in the areas that impact you, to help you make those. You know, really confident financial decisions, and this comes about, like I said, individually, who you are, what you have, if you have assets, if you're wanting to leave a legacy for your children or not. There's a lot of things that you've gotta explore that way, but until you can get that. A foundation of those first six steps down, then understanding how that kind of formulates and finishes off is coming through your financial know-how. Basically I've just covered my retirement readiness scorecard. This is a simplified version I will be using in my bootcamp. I have a different version I use in my VIP session, but I really would love for you to join the bootcamp. Use the scorecard to assess where you are at the start of the re of the bootcamp. And then the purpose of the bootcamp is to help you understand the areas you're lacking, where you need to, focus on and within those areas what those steps would be. We're gonna get into the specifics of, this would be the next step here. This would be the next step here. It's also a one-on-one. It's in a group. But to be able to specifically ask your questions for yourself to get those answered. And as I said in last episode, if you were able to listen about the bootcamp, if you're unable to attend live, I am going to be holding them 11 o'clock Mountain time. Trying to hit some of those lunch hours if you have to work. But I know I can't do every, I can't do after work. My energy is not as good. It will be at 11. I will get the replays out as quickly as possible, so those of you who can't attend can watch and then send in your questions from that day to get specifically answered the next day. This will be a very. Full bootcamp to give you specifics to help you, understand better where you are on that retirement preparation scale and what you need to do. I believe retirement is possible for everyone. I I believe that. I believe that for you, even if you have doubt in your mind how you get there, the journey you take will be different. It will look different than somebody else's, and it should. You need to create something for yourself. What I don't like to hear is individuals who just go with the flow. They listen to what others are doing, and you should listen to others, but you need to take them in and assess them. Is that right for you? Is that what you want? Are you filling a different pole? What do you need to explore? That is what this bootcamp is for, to help you broaden your understanding of retirement planning and defining a purpose. Defining that purpose is going to be your success step. That is what is going to be able to create the next phase of happiness. How many people get there? They're bored out of their mind. They end up just going back to work, or they never leave work to begin with 'cause they don't know what they want to do. Next episode, I'm diving deeper into retirement vision. I know a lot of people skip past these episodes. These are, these are the necessities. Doing the work, doing the numbers is the one thing, but how we create those and craft those numbers comes off of the vision. And then the bonus episode that week will help you understand purpose, help you give you some more ideas of what retirement can look like. As I interview a wonderful financial planner connection of mine. He has some great stories, his philosophy, his support. I hope you will turn tune into that. If you're interested in the bootcamp, be sure to click the link down in the show notes, get signed up, make sure you're receiving those replays. Again, there is a bonus on day four, so June 6th. I'm just gonna go ahead and share it here 'cause I do hate when people are like, you gotta get in for the bonus. I will be doing some free coaching for you coming on day four. After you've gone through those three days, be able to sign up for a 30 minute free coaching session about what you've covered. Get some more clarity, get some more action steps lined up, and be able to then go off and increase your readiness. That's all I have for you in today's episode. I hope you'll join me in the bootcamp, and if not, that's okay. These will be on the regular, so if it's not gonna work out for June, as I know summer vacations are coming look for the next one. But I'm excited to also talk about Retirement Vision next week and give you the bonus episode from my wonderful friend Brian to help you explore what retirements can be.  Last week we talked about fears and limiting beliefs that may be holding us back from retirement planning. If you haven't listened to that episode, go give it a listen and it'll hopefully unfreeze you, help you, be ready to start taking those steps to retirement. This week we're talking about how to assess your readiness for retirement. You know, retirement planning, unless you work with a financial planner, and even then, really the focus is about that number, we talked about that in last episode and yes, we need to try and reach that number, but there is so much more to planning for retirement than just money. I've believed that that's been a motto of mine and we really need to better understand. What, what and how to prepare for retirement to make that number that we're trying to achieve more realistic. In this episode, I'm going to help you better understand what the areas are, what the things are that you need to think about in planning for retirement. But we're gonna walk you through. The concepts of readiness. How do you know if you're ready? Well, there's some areas that certain things need to happen, not with perfection. Definitely we're still human, but really going through an understanding of all of these areas, what it takes, kind of the roadmap. As we talk about this, you know, this will be okay, do this one, then do this one, then do this. And there's statements within each that kind of say, I've done all of these things. What we're going to do is just review that. It is a scorecard that I'm using in my bootcamp. I will share more about my bootcamp if you haven't listened to the last episode and how this fits in with that three day experience. To kick off area one of retirement readiness, it's your financial starting point. Within this area, you need to know your current household income. It's surprising how many people don't really know that. The second thing, I know my exact expenses, and I'm going to use exact loosely because I track them and I understand where my money goes each month. You have this level of awareness of your spending, what it takes to run your household. I talked about that last week, and just really understanding your expenses. S statement number three. I know how much debt I owe and I have a plan to pay it off the last, I have a savings amount that can support any unexpected expense. These four areas give you an idea of where to start and how to solve that last one with a savings amount, your emergency fund as. Some people call it that can really support those expenses. And these are not even emergencies. Those expenses that are not the monthly that kind of come sporadically or they do have a. They do have a system that they're showing up maybe annually, quarterly, bi-annually, whatever, but that you have an amount set aside that is not having you take, dig into your credit card. This is a huge one and most clients I work with when they come to me. debt's paid off. They're looking to just support a tracking system or get a better leaning in of their current finances. This is a gaping hole, and this is something that is crucial. I think this is the tipping point for most people to find themselves, quote further in debt or to fill not prepared. Really diving into having this sinking fund amount set aside. sinking fund, emergency fund set aside to cover the what ifs. You're gonna still have this in retirement, so while you might feel really good about those other statements, it may be that area that you need to really hone in on and get really comfortable with. But this, that's how you kind of assess your readiness in each of these seven areas. The next area is to shape your retirement future. You have a clear vision of what you want to do every day in retirement. It's more than just traveling or playing golf with the buddies. You've got to understand the every day. The second statement I've considered, where I'll live, what I'll do, and how I'll spend my time. I have defined my purpose for retirement. We have a purpose going to work. Whether it's a challenging position we're in, we enjoy the company we have. It's, whatever that purpose is, we now need to find something to support our retirement purpose. What is that? It can be anything. It can be anything. And last, within this retirement future is I have a general retirement date in Mind General, probably the year. And you've heard, if you've heard. Or been a listener for a while. You've heard me say how that was really hard for me to choose the month, the day, not necessarily the year or so, but just to under, just to think like in five years. If you're thinking about 2030 or 2035 that you've already considered that, that's shaping your retirement future. Area number three is that you're mapping out or you have mapped out your retirement expenses. You have considered all potential expenses that will impact your retirement. That's why we need the vision. What are we doing daily? What are we doing for great experiences? What are we doing seasonally? These can have an expense and you know it will impact our retirement budget. Consider those. You've estimated those costs and you now have created an estimated retirement budget. That is how you begin to map out your retirement expenses. This is how you get closer to creating that FI number accuracy. Area number four, stack your savings for retirement. Last episode we talked about not being a consistent saver, so in this area for readiness, you're gonna be consistently saving for retirement. You are also going to have a plan. To increase that savings amount as often and as much as possible. This may be coming from wage increases, this may come from debt payoff. You know that you have that plan of, okay, this time, or if this happens, then I will increase my retirement savings and continue to do that as much and as often as possible. And the last section, or the last thing for this area is that you contribute to retirement accounts. First for employer match. Regardless the type of retirement account, we want to get that match first, and then as you feel best fits your retirement strategy, you are saving into other retirement accounts. Really stacking your savings, really exploring the different types of retirement accounts, investment accounts, those types of things will help you, increase that savings in many multiple ways. Area number five, plan your retirement paycheck. I know that sounds kind of funny, but we still need to have a paycheck and how it's coming in. Within this, you're going to understand your expected income sources. Where's your income coming in from retirement? You know, is it just investments? Do you have a pension and when, or if you have social security, how does that fit into creating that paycheck? Secondly, with that, I, I know when and how to maximize my social security benefits, knowing that early withdraw on age or, the full maximum benefit, what that looks like and how to maximize that. And the last one in this is that you have a strategy to withdraw from retirement savings in the tax efficient way. Definitely a financial planner to support you on this, however. Gaining an understanding of first the tax brackets. If you are going to draw down and it's going to bump you into that, what would that mean? That's what that statement means of a strategy to kind of put you in what income level, what taxes are you paying? how does that all work? You're going to have tax deferred, you're gonna have taxable income. And just understanding that. I would, really, really strongly suggest understanding that the best you can before going in and, getting support from a financial planner. Area number six, smart debt strategies. You have a plan to pay off high interest debt before retirement. I highly suggest not heading into retirement without. Credit card debt, that high interest debt. Really make sure that you have that plan to get that paid off. Secondly, I know how much debt, if any, 'cause we've talked about some people not wanting to pay off their mortgage and other people do. But knowing how much debt you will carry into retirement and how it will impact your budget. That's going to be a factor in that FI number, so make sure you understand that. And then the last thing in this area is that you understand how you're going to manage that mortgage in retirement, if you're taking it with you, and also how you're going to manage debt. How are you going to purchase a vehicle? How are you going to, extend yourself with credit in different ways. Just have a plan. Just be prepared. Make sure it is thought through and not just that is your default. The last area. Expand your financial know-how. The first six areas are specific and helping you get into the basics of retirement readiness. Your expand, your financial knowhow is going to be where you are going to hit your personal situations. Within here, you're going to stay informed about personal finance, meaning you're understanding financial literacy more you're, you're striving to learn more, educate yourself, and understand retirement strategies, how they can work, how they will affect you if they're for you or not. Second is I understand how investment taxes and market changes can affect my retirement. Being prepared for that, understanding those things and just, getting that knowledge so that you can make those really good decisions. And that comes into the third one, which I feel confident making financial decisions and working with a financial professional. Even if you are working with a financial professional, you should be the one making the decisions. They're somebody that is an expert in different areas. They should be giving you options, educating you, supporting you. So really here, expanding your financial know-how to increase your knowledge in the areas that impact you, to help you make those. You know, really confident financial decisions, and this comes about, like I said, individually, who you are, what you have, if you have assets, if you're wanting to leave a legacy for your children or not. There's a lot of things that you've gotta explore that way, but until you can get that. A foundation of those first six steps down, then understanding how that kind of formulates and finishes off is coming through your financial know-how. Basically I've just covered my retirement readiness scorecard. This is a simplified version I will be using in my bootcamp. I have a different version I use in my VIP session, but I really would love for you to join the bootcamp. Use the scorecard to assess where you are at the start of the re of the bootcamp. And then the purpose of the bootcamp is to help you understand the areas you're lacking, where you need to, focus on and within those areas what those steps would be. We're gonna get into the specifics of, this would be the next step here. This would be the next step here. It's also a one-on-one. It's in a group. But to be able to specifically ask your questions for yourself to get those answered. And as I said in last episode, if you were able to listen about the bootcamp, if you're unable to attend live, I am going to be holding them 11 o'clock Mountain time. Trying to hit some of those lunch hours if you have to work. But I know I can't do every, I can't do after work. My energy is not as good. It will be at 11. I will get the replays out as quickly as possible, so those of you who can't attend can watch and then send in your questions from that day to get specifically answered the next day. This will be a very. Full bootcamp to give you specifics to help you, understand better where you are on that retirement preparation scale and what you need to do. I believe retirement is possible for everyone. I I believe that. I believe that for you, even if you have doubt in your mind how you get there, the journey you take will be different. It will look different than somebody else's, and it should. You need to create something for yourself. What I don't like to hear is individuals who just go with the flow. They listen to what others are doing, and you should listen to others, but you need to take them in and assess them. Is that right for you? Is that what you want? Are you filling a different pole? What do you need to explore? That is what this bootcamp is for, to help you broaden your understanding of retirement planning and defining a purpose. Defining that purpose is going to be your success step. That is what is going to be able to create the next phase of happiness. How many people get there? They're bored out of their mind. They end up just going back to work, or they never leave work to begin with 'cause they don't know what they want to do. Next episode, I'm diving deeper into retirement vision. I know a lot of people skip past these episodes. These are, these are the necessities. Doing the work, doing the numbers is the one thing, but how we create those and craft those numbers comes off of the vision. And then the bonus episode that week will help you understand purpose, help you give you some more ideas of what retirement can look like. As I interview a wonderful financial planner connection of mine. He has some great stories, his philosophy, his support. I hope you will turn tune into that. If you're interested in the bootcamp, be sure to click the link down in the show notes, get signed up, make sure you're receiving those replays. Again, there is a bonus on day four, so June 6th. I'm just gonna go ahead and share it here 'cause I do hate when people are like, you gotta get in for the bonus. I will be doing some free coaching for you coming on day four. After you've gone through those three days, be able to sign up for a 30 minute free coaching session about what you've covered. Get some more clarity, get some more action steps lined up, and be able to then go off and increase your readiness. That's all I have for you in today's episode. I hope you'll join me in the bootcamp, and if not, that's okay. These will be on the regular, so if it's not gonna work out for June, as I know summer vacations are coming look for the next one. But I'm excited to also talk about Retirement Vision next week and give you the bonus episode from my wonderful friend Brian to help you explore what retirements can be.