Monday I offered my Ready Rule #5, and today's rule is: Assess Your Income Sources.
When approaching retirement it is critical to establish how much income you will have and from what sources it will come. It can help to sit down with pen & paper and list what comes to mind:
- Social Security - everyone will get this eventually, though when you should start to draw is a question we can help answer.
- Income from retirement accounts - do you have 401(k), 403(b), IRA, SEP, SIMPLE, Keogh, or other accounts of this type?
- Pensions - though fewer and fewer employers offer traditional pensions, don't overlook the possibility that you may be entitled to a pension from a current or former employer.
- Investment accounts - retirement is what most people are saving for, and investments can be used to generate income. Holdings for capital growth while you are working may not be ideal for generating income when you retire, so it's good to review.
- Rents, royalties, etc - a possibility in some cases.
- Part-time work - everyone's situation differs, and you may choose to work part-time to keep busy or bring in additional income.
Once you have an idea of what to expect for income, you can evaluate your expenses and see how they match up. Your financial advisor can be a great help in the process. While we won't know how much your utility bill is each month, we can offer perspective. We talk to thousands of clients annually and help them as they near retirement. So assess your income sources and check back tomorrow for:
Ready Rule #3: Treat Your Assets Like Your Career
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).