Anxious About Your Retirement Fund? Three Tips To Take Control Of Your Future

Jason LaBarge

Financial Advisor and President, LaBarge Financial

Many Americans are worried they don’t have the right amount saved for retirement, and it's a question I’m asked often.

I recently spoke with the local news teams at CBS Baltimore and Fox45 about how to help ensure you have enough saved for retirement. This is an important conversation, so I want to explain the topic in more detail.

Many online “experts” say to aim for $1 million, but the amount needed in retirement is not one-size-fits-all for families. But there are a few strategies that may help you make sure your retirement fund is large enough and may last through your golden years.

Understand Your Day-To-Day Expenses

Retirement expenses are different for everyone. The goal is to determine how much money you’ll need to live comfortably before you can set an accurate savings goal and income strategy.

First, you need to take a look at how much you’re spending before you retire. This includes a mortgage, utility bills, groceries, gas, emergency expenses and more that will continue into retirement.

Once you determine a monthly budget for your daily expenses, the rest of your retirement fund can be used for those larger expenses outside of the day-to-day, like travel, home upgrades, medical expenses, or fixing your boat to head out on the Severn River with your grandkids.

Consider Your Income Streams

Establishing a steady income is crucial to living a long and happy retirement.

To do this, we use our red money, green money philosophy. “Red money” refers to investments that carry risk, like stocks and mutual funds, while “green money” is guaranteed income, like Social Security, pensions and some annuities.

Green money is important to ensuring you have a steady stream of income that can help you pay the monthly bills. You can spend all of your savings, but as long as you still have a consistent income coming in, you should be able to cover your expenses.

However, you shouldn’t have every dollar saved allocated for income because that limits your long-term growth. For the other expenses that will come up, your red money is invested with a bit more risk, but it has the chance to provide more growth opportunity. That money could be stashed within an IRA or 401(k) account and accessed when needed for a trip, emergency expense, home upgrade or more.

Plan For A Long Life

People are living longer than ever before, and that means you should be prepared to live a long retirement. You should aim to have enough money saved to ensure your needs will be met even if you live until age 90.

Along with people living longer, health care costs continue to rise. About 70% of people over the age of 65 will need some form of long-term care, and it could cost hundreds of thousands of dollars. You should have a long-term care plan, and assets like long-term care insurance or annuities can help with this expense.

We didn’t have time to dig into other considerations, including how taxes impact retirement or income distribution strategies. We can evaluate those in more detail in a future article, but the takeaway is that it’s important to have a comprehensive retirement plan.

Retirement is one of the most important stages of your life, and if you still feel anxious about your future, consider seeking help. No one wants to run out of money, and any leftover funds can be passed down to the next generation.

A financial advisor can help you map out your golden years and craft a plan that prepares your money to last through retirement.