According to a study by wealth management giant Merrill Lynch, most Americans aren’t fully prepared for retirement.
This isn’t hyperbole. It’s born out in finding after finding. To wit: some 81% of Merrill’s study respondents weren’t sure how much they’d need to live a comfortable lifestyle in retirement. Only slightly more were confident that they were in a position to fund their retirement for 10 years or longer. And many younger retirees-to-be had doubts that they could rely on government safety net programs like Social Security for support in retirement.
If these sentiments feel familiar, it’s time for you to assess your retirement readiness. As you take stock of your financial situation, look for these five signs that you may not be ready for what’s next.
1. You Don’t Have a Financial Plan in Place
Without a financial plan in place, you’re flying blind into retirement. Your first order of business is to connect with a seasoned financial planner and develop a plan that accounts for your near-, medium-, and long-term financial and life goals, including retirement.
2. You’re Not Yet Working With a Professional Wealth Manager
Seasoned wealth management professionals can’t work miracles, but they do know their way around the markets better than the average retail investor. Work with an experienced financial professional who’s willing to develop a truly customized investing plan, rather than a cookie-cutter “strategy” that fails to adjust to your changing needs.
3. You Don’t Know What to Expect From Social Security
Far too few Americans know what to expect once they hit Social Security eligibility. While you should never rely on Social Security as your primary income stream in retirement, your monthly draw is a constant that you’ll need to know to get a better sense of your post-career cash flow needs.
4. You Haven’t Thought Through Possible or Likely Expenses in Retirement, Such as Healthcare and Long-Term Care
Age comes for us all. Sooner or later, you’re likely to incur serious medical and/or long-term care expenses. The latter, in particular, can be ruinous for the unprepared. Talk to your financial advisor about long-term care insurance and other forms of fiscal protection for the inevitable.
5. You’re Still Supporting Adult Children
Plan and prepare all you want. If you’re still providing meaningful financial support to your adult children, the payoff may have to wait. A thoughtful financial plan can certainly reduce the fiscal impact of ongoing dependent support, so this is something you’ll need to discuss with your financial advisor.
Take Control of Your Financial Future Today
Taking control of your financial future and making real progress toward retirement readiness isn’t quite as simple as reversing the five conditions described above.
However, you and your loved ones would be well served by a comprehensive financial plan developed in consultation with a seasoned financial planning professional, along with a customized wealth management plan that accounts for all your life goals — not just retirement.
No matter where you are in life, the road ahead is sure to include some twists and turns. Don’t expect it to be as smooth as you’d like, either. It’s time to saddle up and take the wheel.