Originally Published Oct. 10, 2014.
Many pre-retirees feel that they are missing the mark when it comes to retirement planning. However, by taking the right steps, you can work toward becoming retirement-ready. BLACK ENTERPRISE consulted Certified Financial Planner Ivory Johnson, founder of Delancey Wealth Management. Johnson shared tips to help get pre-retirees on track.
Assess your debt load.
One red flag that you’re not ready to leave the workforce is having a lot of debt. Says Johnson, “The biggest sign is when you have a big mortgage. If you have a mortgage that is going to last throughout retirement, maybe because you’re paying for education and you took out money from the house, that’s a fixed expense. So if you have $2,000 a month that you have to pay, that’s $2,000 a month that could be going into your retirement account. If you find that you have a lot of debt, like credit cards, that shows you’ve been spending more than you’ve been bringing in while you were working. So how can you pay all of your bills when you’re not working?
Get savings on track.
If you haven’t made an effort to put money away in emergency savings, start now. “You’re also not ready to retire if you’re not saving. If you’re just living check-to-check, that’s a sign. You have to ask yourself how you’re going to realistically be able to retire if you’re in this situation, says Johnson.
Set a goal.
Decide what your priorities are. For example, is retirement at a certain age important to you? “Find out what your goals are and what you are trying to do. If it is your goal to retire at a certain age, you have to decide what you want to give up today. Then you have to sit down with a financial planner, says Johnson.
To read part 2 of Johnson’s retirement advice, click here.
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