Connie Gores was in her 50s, with one daughter in college and another recently graduated, when she focused on preparing for retirement.
Gores, who worked in higher education and was a university president, met with a financial adviser set up by her former employer during the 2008 financial crisis. “The conversation changed my life,” she recalls from her house in North Carolina.
She asked the advisor to project what her financial life would look like in retirement with the benefits and savings she had at the time. “He said to me, ‘Well, I just want to tell you that right now, as things stand, you won’t have enough money to live the way you want to live, and you’ll basically have Social Security and more.
It was a red flag, Gores said.
His mother had worked by the hour until she was 82, fell ill, and died three months later. “It’s not the life I wanted,” Gores said. “I wanted to have a different real retirement.”
North Carolina retiree Connie Gores prepares for a visit with her grandchildren.
CNBC Jerry Fraser
She and her advisor discussed different strategies and came up with a plan to save and invest her money. She started maxing out her workplace retirement plan and a Roth IRA. She stuck to the plan, revised it every year for the next decade, and was able to retire at 65 – several years earlier than she had planned.
You can’t just assume that “I’m just going to keep putting money away in my retirement account and see the value go up every year.”
Shelly Ann Eweka
Senior Director of Financial Planning Strategy at TIAA
“Staying the course” is often cited as a key retirement savings strategy by financial advisors. Still, that can be difficult for many workers as they try to weather a dramatic stock market drop. The S&P 500 Indexfor example, lost 20% in the first six months of this year, the worst mid-year performance in more than half a century.
“It’s emotionally difficult when you go online and see your account value drop, drop, drop, but I encourage everyone to stay focused,” said Shelly-Ann Eweka, certified financial planner and director. principal of financial planning strategy at TIAA.
Be sure to “stress test” your strategy
With inflation rising and account balances falling, financial advisers say having a plan is more important than ever – and can help “test” your investment strategy.
“You can’t just assume that ‘I’m just going to keep putting money aside in my retirement account and see the value go up every year, then when I retire I’ll take the money out to cover my style. of life and that’s it,'” Eweka said.
Yet many Americans are unprepared. According a recent survey by the Transamerica Center for Retirement Studies. According to the survey, only 35% work with a professional financial advisor and only 29% have a written plan.
How to make a financial plan
Carol Yepes | time | Getty Images
To start building a financial plan for retirement, advisors say you need to:
- Understand your expenses and your retirement needs and wants.
- Estimate the income you will receive from pension, social security, investments and any part-time or other income.
- Also consider future health care costs.
“It’s really important for people to know what those costs are — to see how much they need to allocate to health care so they can truly maintain their standard of living,” said Ron Mastrogiovanni, president and CEO of HealthView. Services.
Gores, now 68, has taken these steps and is sticking to her financial plan. She believes she will be able to continue to live comfortably in retirement while earning extra income through executive coaching, consulting and part-time teaching.
She also now has time to travel and spend time with her grandchildren. “I still have a purpose and my profession, and I can also be that nanny that is part of their life,” she said.