A good long-term strategy will trump any short-term political impact on your retirement plan. Remember to keep your perspective, regardless of your age and stage, and focus on strategy, not headlines.
It is admittedly a worrisome time for Americans whose retirement is in the near future. Will Medicaid and Medicare still be in place, are their portfolios now unbalanced and what will happen to personal tax rates? There seem to be a lot of unknowns, more so than in the past.
The Jewish News of Northern California says in a recent article, “Retirement planning in the Trump era: same as it ever was,” that folks need to slow down. Here are some guidelines to help secure soon-to be retirees’ finances now and through future administrations.
Don’t make an investment or personal finance decision based on politics. Your financial plan should drive decisions based on your needs, objectives, risk tolerance and financial values. It is designed for the long term, not in response to a political event.
Diversify your portfolio. It is recommended that you combine different asset classes because they gain or lose value at different times based on changing economic factors. You can live with losses offset by gains that produce a long-term increase in the value of a well-planned portfolio. Separate asset classes are stocks, bonds, real estate, and commodities.
Plan the funding of any lump-sum purchases. This could include a European vacation, a new car or a new home. You should look at how you’ll generate regular income. It’s okay to have some fun early in retirement, but keep in mind that you’ll need a sufficient and steady cash flow to replace your earned income.
Keep track of what you spend now and estimate your spending in retirement. Be prepared to reduce your lifestyle a bit, but you also may find yourself eliminating some expenses, which means more spendable income than you thought you’d have.
Review and understand both your retirement income and current spending. Now is the time to make sure that you have an honest assessment of your cost of living, including what is discretionary and what is fixed. Pair that information with realistic market return and life expectancy information and you should have a better idea of what your retirement life will look like.
Make sure your estate plan is up to date. If the last time you reviewed your estate plan was more than four years ago, meet with an experienced estate planning attorney and review your estate plan.
Reference: The Jewish News of Northern California (August 14, 2017) “Retirement planning in the Trump era: same as it ever was”