Will the money in your bank accounts last through retirement? Keep your accounts in the black by following these steps to retirement financial planning:

Monitor the performance of your investment portfolio

During quarterly and annual investment checkups with your financial professional, start with two simple questions. Did you make what you expected? Did you encounter unplanned expenses or changes in your contributions?

Keep an emergency savings reserve

Unforeseen expenses, like a home repair or medical emergency, can quickly derail your retirement savings. Keep an emergency fund with enough money to cover three to six months of living expenses. Emergency funds should be held in a liquid but stable account so you can access them when you need them. Interest-bearing savings and money market accounts are good options. Steer clear of being overly conservative in the size of your savings reserve. Because a savings account won't match market gains, you should put most of your money in longer-term investments so that it has the chance to grow with time.

Your emergency savings can also act as a hedge against the unexpected. If necessary, you can use the emergency fund to supplement income during a down market.

Set an asset allocation appropriate for you

Investments are fluid. Some are more volatile than others, but all are subject to market fluctuations. Adjust your assets to ensure they align with your current goals and tolerance for risk. Specifically, reduce your risk exposure when retirement nears by choosing more conservative investments.

Itemize your income plan

Ensure that you understand where your money will be coming from in retirement, such as Social Security and pensions, and how your portfolio is going to generate money. Are you going to collect interest? Get dividends? How much are you going to have to sell each year to maintain your current standard of living?

Sell assets strategically

Selling any asset can have tax implications, and the proceeds could nudge you into a higher tax bracket. Naturally, you want to minimize taxes when you’re selling assets to generate income in retirement, but you must balance that concern with your portfolio’s allocation strategy.

As you weigh the tax implications of a sale with your long-term goals, you may find that transferring assets makes more sense for your estate plan. Your Financial Advisor can help you review your options.

Talk to your partner and your family

You and your significant other should be on the same page regarding your financial portfolio. Your conversations should cover key financial details, such as:

  • Current total assets
  • How much you can afford to spend per month and annually
  • The amount you have in savings
  • Where the funds are located
  • How they are distributed

Discuss your spending. Identify what’s nonessential and what’s necessary. When you know where your money goes, you can easily adjust your spending in the event of financial upheaval, without sacrificing the essentials.

Ask those you are close to — maybe your children or grandchildren — to be part of the conversation. They should understand your goals and resources. Retirement planning is an ongoing process — these are not steps you should take just once. But taking them, and repeating them as needed, will help ensure your retirement funds last as long as your retirement years.

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