Step 2.  Assessing your Current Financial Position

To help you achieve your retirement goals, you need to take stock of where you are.

Net worth:  The development of a Net Worth Statement is critical to identify all of the assets from which retirement income may be derived. A net worth statement gives you a backdrop from which to move forward toward accomplishing your goals.

Retirement budget:  With goals firmly in hand, the starting point for all retirement income discussions is a retirement budget.  Download our Cash Flow Statement to calculate what your lifestyle will be during your first full year of retirement. This will help you determine the feasibility of your retirement date.

Money needs during retirement:  Expect that your cash flow statement will show that you need at least 80% of your pre-retirement income.  A need for 90% of pre-retirement income is a more conservative approach because few retirees actually lower their standard of living when they retire.  Yes, commuting costs are eliminated, but then leisure travel picks up to replace the prior commuting costs.  There are only a few clear reductions in your living costs after you retire, such as payroll taxes (Social Security and Medicare taxes).
 

Continue to Step 3.  Identifying Retirement Income Sources

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