10 basic steps for retirement planning

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If you plan to retire in the next 20 years, now is the time to look at your options and start planning so that you can make more informed decisions about your future and meet your long-term goals.

A professionally created retirement plan usually includes a review of your estate plan and portfolio investments, tax planning, education funding strategies, insurance and risk management, and retirement and senior issues. We recommend working with a qualified, fiduciary adviser to ensure that you are doing everything you can to build and protect your wealth in the most effective ways possible.

Though individual situations vary, these 10 basic recommendations should be considered by anyone preparing for retirement. The sooner you start preparing, the more successful you’ll be.


Build an adequate emergency reserve of three to six months of living expenses. This can reduce stress and prevent the need for loans from retirement plans, which can have undesirable financial consequences, in the event of job loss or other emergencies.


Contribute the maximum you can annually to your 401(k) — or at least enough to receive a full employer match. If you are self-employed, look into options such as a SEP IRA or Solo 401k that allow you to contribute more than a Traditional IRA.


Make sure you have at least the most basic estate planning documents in place, including wills, powers of attorney, healthcare proxy, and possibly a trust. If your documents were created a while ago, review them every few years to make sure executors and beneficiaries are still viable.


Don’t scrimp on tax planning. Spending extra dollars using an experienced, proactive CPA can save you thousands in taxes. If you work with a financial advisor it can be a good idea to keep them in the loop regarding investment tax strategies.


Ensure that you have a diversified investment portfolio across all of your accounts – tax-deferred, tax-free and taxable. Make sure your portfolio uses funds with low expense ratios and is rebalanced regularly.


Coordinate your insurance needs with any that your employer may offer. Ensure that your home is adequately covered, and that your deductibles and premiums are appropriate. People are more likely to become disabled than they are to die young, so be sure you have a game plan or adequate insurance coverage should you become disabled.

Life insurance should also be evaluated to provide for loved ones in case of death. Long term care insurance should be considered if you have an estate needing extra protection in the case of a long or debilitating illness.


Don’t sacrifice your own retirement to put your children through college. If you are in a position to help your kids pay off any student loans once they graduate, great!

They can get loans, but it isn’t possible to take out loans for your retirement.


Consider any large purchases you may want to make down the road, and how you will save for and/or finance them. Planning ahead will provide many more options.


Be conscientious about your debts, and have a plan in place for how you will either pay them off prior to retirement, or continue to pay for them once you are retired.


Remember to periodically review any financial or estate plans you do put into place. Things change, rules may change, and as we get closer to retirement, what may have made sense previously may need adjustment.

We are living longer than our parents and grandparents, and planning for a long retirement is more important than ever. Though this list is by no means complete, it is a good place to start.

Heather Cleland, CFP, is a certified financial planner, certified divorce financial analyst and partner with Willow Creek Wealth Management (willowcreekwealth.com, 707-829-1146) in Sebastopol. Wealth Matters is a monthly column from the firm’s advisers.

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