Planning for the Ultimate Vacation: Retirement

Finanical Advisor Barry Bigelow says Planning for Retirement Requires More Planning than Your Annual Family Vacations

DULUTH, Minn. – Summer is in full gear and for many, that means traveling the country and taking some much-needed time off.

But if you’re like many Americans, there’s a good chance you’ve spent more time planning this summer’s getaway than you have planning your ultimate vacation; retirement.

Great Waters Financial Lead Advisor Barry Bigelow says retirement planning requires just as much, if not more planning than your annual family trips.

Bigelow shared a 3-point checklist Wednesday morning on FOX 21 Local News to help create a financial plan that will lead you through retirement.


Diversify your investments:

While a 401(k) or IRA is a good start, be sure you have additional savings and investments to tap into in retirement too. Additionally, be sure to diversify investments within those accounts.

Diversity is important in investing because it helps to prevent the negative performance of a few investments from harming the entirety of your portfolio.

Work to diversify investments within your retirement portfolio across asset classes (equities, fixed income and cash) as well as sectors within each type of asset.

If you’re heavily invested in technology stocks, for example, and the tech sector sees another bubble burst, your future retirement income may be impacted. It is the variety of holdings, rather than quantity of holdings, that matters for diversification


Assess your risk:

Much like your idea of the perfect vacation has likely changed over the last 20 or 30 years, it is likely that your needs from your investments have shifted just as much.

All too often retirement savers haven’t evaluated their savings and investment allocations in decades.

It’s important to update your strategy regularly and rebalance to fit your changing needs.

The closer you get to retirement, the more your focus should shift from growing your money to preserving the account value and, in many cases, your investment allocations should become more conservative.

If it’s been a while since you took a comprehensive look at your investments, it may be time to move this to the top of your to-do list.


Develop a distribution plan:

Saving for retirement is only one part of the process.

Spending all of your energy on savings without planning for how you will withdraw those savings in retirement is like taking a cross-country car trip without a map.

Without a distribution plan in place, you could potentially put yourself at risk of outliving your retirement savings.

Even those who are more than a few years away from retirement should have an idea of their distribution plan so that they can continue to save and invest appropriately for their retirement years.

Often a retirement distribution plan includes what income source you should draw from first through the last, when to claim Social Security, how to structure retirement assets in a tax-advantageous manner and an amended distribution plan for the surviving spouse.

Work with a retirement planning specialist to make sure you have an appropriate distribution plan in place.

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