Eight steps to take when you're ten years from retirement
If you鈥檙e a decade or so from retirement, chances are you鈥檝e spent lots of time聽envisioning what life will be like聽once聽you stop working. If you haven鈥檛 done a lot of planning, perhaps you鈥檙e worried about whether you鈥檒l be financially prepared. Fortunately, a decade is plenty of time聽to alter聽your trajectory if necessary.
Ten years out is a good time聽to ramp up your聽, get rid of your debt and reconsider your portfolio, according to the National Association of Personal Financial Advisors, the largest fee-only financial advisor group in the U.S.
Here鈥檚 NAPFA鈥檚 list聽of the eight items you should address today to help get you ready for retirement in 10 years:
- Be tax efficient with your investments.聽For example, you should defer as much of your salary as you can to your defined contribution plans.
- Save to an emergency fund聽and stay aware of your company鈥檚 financial situation. Companies are prone to reorganizations and layoffs, and longtime聽workers can be vulnerable.
- Brainstorm any big-ticket financial commitments聽for the next 10 years, such as聽taking care of聽an elderly parent, and consider how such expenditures聽might affect your ability to retire when you鈥檇 like.
- Take a hard look at any major debts聽that you have and develop a 10-year plan to eliminate them.
- Reallocate your portfolio聽based on your earnings timeline with a focus on performance, risk and expenses. Decide when,聽or whether, you should shift to a more conservative asset allocation.
- Review what your tax obligations may be聽with your current investments and use tax-optimization strategies to boost your savings.
- Review your estate documents聽to ensure the language is still accurate. For example, are the named trustees and beneficiaries still alive and capable?
- Research when your stock-based compensation might expire聽and what stock awards you can retain after retirement.
With 10 years to work with, it鈥檚 not too late to save enough to fund a reasonable retirement. But聽without a smart plan in place, it might not be the retirement you imagined. If you need help tackling the items on this list, consider working with a professional. You can find fee-only planners聽.
