1. Be careful in putting all your investments (nest egg) in one basket
A planned well-diversified portfolio facilitates positive performance of some investments and can balance out poor performance of others investments. The mix of investments in different asset classes (e.g., stocks, bonds, real estate) help keep your retirement goals on track even when one investment goes through and downsizing period. Diversification is vitally important as you get near retirement. You have fewer years of income to rebuild savings if some investments post losses.
Contact a Certified Financial Planner (CFP) to recommend diversification strategies based on your goals and risk tolerance. Regular meetings with Certified Financial Planner are encouraged to keep your goals on track for a well planned retirement.
2. Get your estate plan in order to keep your heirs aware
Make things much easier for your loved ones in the future by talking through estate planning today. Your CFP advisor and attorney can work with you on estate planning. You will obviously want to have your exact wishes of your estate carried out.
Estate planning points:
3. Don't wait too long to think about your current and long-term health care needs
Protecting your assets means planning carefully for health care needs (expected and the unexpected). Your first step is to make sure you have enough medical coverage, plus a long-term care strategy.
The process begins by finding out which Medicare benefits you’ll be eligible for down the road and researching options for supplemental insurance (assuming you are over 65). For example, hybrid life insurance policies combine life insurance with long-term care benefits that may help you pay for the costs of a nursing home, assisted living or in-home care — expenses Medicare does not cover. In general, these hybrid policies may be more affordable than traditional long-term care policies. Check them out throughly with your CFP or a licensed insurance agent.
4. Don't keep your 401(k) accounts in multiple places
If you have changed jobs several times during your career, you might have multiple 401(k)s at different employers. It makes sense to consolidate these accounts. Be careful, before you do, discuss a few critical factors with your CFP:
5. Be aware of paying too much in taxes
It make sense to pay taxes now to lessen your future tax liability. Could charitable gifts lower your taxable income? Are there tax deductions you’re not using to your advantage? Your CFP and tax accountant can work together to create a tax strategy for you.
Schedule a retirement check-in with your CFP!