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5 things to do 10 years before your retirement

If you don't plan ahead, you could be putting your finances during retirement in jeopardy. Dan Ament, financial advisor with Morgan Stanley,
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GOLDEN VALLEY, Minn. - The ‘Red Zone’ in football refers to the 20 yards of the field before the end zone where the game is won or lost. Similarly, when planning for your future retirement, it is important to huddle up and review your strategy to improve your odds of making it to the retirement end zone.

Dan Ament, financial advisor with Morgan Stanley, has five tips to help you score before you retire.

  1. Define what ‘retirement’ means to YOU. For some, it may mean working part-time or pursuing a different career. For others, it may mean never working another day in their life. When you retire is another big factor. Knowing that the longer you are retired, the greater the resources you will need to carry you through.
  2. Estimate how much money you will spend each year in retirement. Consider how much you'll be spending each month or year during your ideal retirement (be realistic). If you haven’t prepared a budget previously, now would be a good time. If your goals include retiring before age 65, consider the ever increasing cost of health care you will need.
  3. Review your ‘financial buckets’ that will provide your future income. Consider the various resources you will have to provide income at retirement. Your 401(k), IRA, Roth IRA, bank savings, investment accounts, Social Security, Pension, etc. While daunting at first, gaining a solid understanding of your holistic financial picture will improve your odds of making to the retirement end zone. Incorporate these financial resources into your financial plan, along with your expense needs to better estimate if your financial resources can support your financial goals. If not, consider ways you can ramp up your savings for your final drive to the end zone.
  4. Assess your investment strategy. The way you’ve been investing for the past 30 years isn’t necessarily the way you should invest for the next 30 years. When we're younger, the focus is on accumulation. However, when you’re in or nearing retirement, you will need to also focus on income and keeping pace with inflation.
  5. Don’t be intimidated by stepping back to contemplate your ‘game plan’ to accomplish your financial goals. As it is often said, “If you fail to plan, you plan to fail!”

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