5 Actions to Take to Retire With Confidence

A positive retirement experience begins with a plan designed to help you live life on your terms. These five actions can help get you there.

a confident woman looks ahead to retirement

Roughly 80 percent of retirees say that it’s a positive new chapter, according to the 2018 Wells Fargo Retirement Study. But being able to retire with confidence requires a carefully thought-out plan regarding your projected financial picture, not to mention being ready for unexpected roadblocks along the way.

“Planning for retirement begins years before the actual date arrives,” says Gabrielle Doss, a Wealth Planner with Wells Fargo Private Bank. Here, she shares five fundamental steps to help you retire with confidence.

1. Dive into the details

“In my view, the single most important thing that a person can do prior to retirement is to have a written, detailed wealth plan,” Doss says.

Ideally, that plan is something that you and your wealth planner and other advisors create together and update periodically, she says. These updates can keep your plan aligned with your financial goals—which may change over time—and allow you to adjust for life or market changes.

”At Wells Fargo Private Bank, our wealth planners can run your plan through various financial stress tests to anticipate the effects of disappointing portfolio performance, higher than expected inflation, or the impact of unexpected major expenses so you can work with your investment professional to create contingency plans,” remarks Doss. (For more, see “How to Plan for Uncertainty.”)

2. Consider your cash flow

An essential part of your written plan is reviewing your current cash flows and projecting cash flow for your retirement years. “An in-depth review of your current income sources and expenses as well as the income sources and expenses that you anticipate in retirement is the foundation,” says Doss.

“Consider whether you plan on working during retirement, either part-time or as a contractor. This information will help us to determine if your goals are achievable or if you need to make adjustments to your savings or spending habits now to achieve your goals in retirement.”

“Developing a cash-flow analysis brings a heightened sense of understanding to your retirement planning,” Doss says. “This can be a reality check or can reaffirm that you are on the right path.”

“Planning for retirement begins years before the actual date arrives.” —Gabrielle Doss, Wealth Planner, Wells Fargo Private Bank

3. Create your second act

Just as important as your savings plan is your life plan in retirement.

“Reviewing your cash flow will trigger thoughts about how you want to spend your time in retirement and what income will be needed to support that lifestyle,” Doss says. “This brings the conversation down to earth from the sometimes intimidating 30,000-foot view of retirement planning.”

Would you like to spend your time traveling abroad, visiting family across the country, volunteering your time with a local charity, or playing golf every day? Doss says the planning process is also the time when people should consider where they want to live and whether they would like to help their children and grandchildren, for example, by helping pay for education costs or by making a down payment on a home.

But Doss also notes that many people discover their spending increases in the first few years of retirement. “As they adjust to their newfound freedom, retirees often schedule more lunches with friends, embark on the long-awaited home improvement project, and have the freedom and flexibility to travel,” so factor those plans into your retirement plan as well.

4. Adjust for ongoing changes

As you get closer to retirement, you and your wealth and investment advisors should consider how your assets are allocated.

Doss says to think about your assets as belonging to different buckets. Discuss with your advisors the order that you will tap into the buckets based on the types of assets in each bucket, the tax implications of liquidating each bucket, and potential growth of each asset. Most people will have a combination of pre-tax retirement plan assets (qualified) and after-tax savings (nonqualified). Plan carefully when deciding the order for withdrawing these funds to help reduce the market risk from tapping into those buckets.

5. Establish an estate plan

An estate plan can help your assets to continue to align with your values and priorities even after your passing. It can also help to spare your loved ones from significant stress and the potential for family conflict.

At a minimum, an estate plan should include a will, powers of attorney, and health care directives, Doss says. Depending on your needs, your plan also may include one or more trusts. Completing these documents and actually executing them can give you confidence that you have a structure in place for taking care of your loved ones should something happen to you. (For more, see “Essentials of Wealth Transfer.”)

“Most people cringe at the thought of planning for the day when they are no longer around,” Doss says. “But I feel that it is the best legacy that you can leave for your family.”

Mark Tosczak is an experienced business writer and marketing consultant based in North Carolina. Image by iStock

What can Wells Fargo do for you?

No matter how your life may be changing, your team at Wells Fargo will be glad to help you plan and prepare. Call now.

Wells Fargo Wealth Planning Center, part of Wells Fargo Private Bank, provides wealth and financial planning services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries.

Wells Fargo and Company and its affiliates do not provide legal advice. Wells Fargo Advisors does not provide tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.

Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo Advisors. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

This information is provided for educational and illustrative purposes only.

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