Are you Ready for Retirement? Advice from Warren Buffett

Mike has worked for the federal government since he graduated from college. He estimates that he will retire in ten years, and he wants to make sure he is prepared when he does. His wife, Lily, is a consultant, who does not have benefits through her job. Lily wants to ensure that she is prepared, as well, and financially ready to retire with her husband or to survive financially should something happen to him. Mike and Lily are smart to be thinking about and planning for retirement now.

Whether you are in your 30s, 40s, 50s, or 60s, everyone needs to take steps to plan if they want to retire someday. Of course, the younger we are when we start, the better prepared we will be to retire when the time comes. No matter what your age, there are things we need to think about and actions we need to take in the years before we stop working. How can we make sure we are financially prepared when the time comes?

Tips for Retirement Planning

The following are some tips to help you get ready for retirement:

• Save Money in an IRA and/or a 401(k) – If you work for an employer with a 401(k) or 403(b) plan, be sure to take advantage of it if you haven’t done so already. If you are self-employed or do not have a 401(k) or 403(b) plan where you work, save money in an IRA instead.
Start younger: The younger you are when you start saving, the better off you will be when you finally stop working. However, even if you are in your 50s when you start, you may still be able to put aside 10 to 15 years worth of savings, which could make a huge difference in the quality of your retirement.
• Talk to a Financial Advisor about How to Invest Your Savings – Get recommendations on how to invest your savings for growth when you are young, and for income when you get ready to retire. Be sure to diversify your investments so you don’t have too much money in one type of fund or investment.
Consider your income sources: Do you have a pension? If so, what amount of income is it expected to provide? Does it provide an income stream to your survivor if you die? Social Security income and a strategy for claiming benefits need to be determined. You can obtain an estimate at the Social Security Administration’s website,
Pay off Your Debts as You Approach Retirement – The closer you are to retirement, the more important it is to have a plan to eliminate all your outstanding loans and credit card debts. If you can also pay off your home and car, you’ll have a lower cost-of-living and a better quality of life once you are living on Social Security and your savings.
Come Up with a Retirement Budget – Your living expenses will probably change after you retire. Some areas, such as commuting and dry cleaning costs will decrease, and others, such as travel and health care costs, may go up. If you haven’t done so, it’s a good time to estimate your monthly budget and revisit it periodically, both before and after retirement.
Consider health care and long-term care costs: As you age, health care costs often increase. Medicare will cover some of these costs but be prepared to pay deductibles, co-pays, and co-insurance. Long-term care expenses are also likely be part of the picture at some point and can be devastatingly expensive. A review of the long-term costs in your area and how to pay for it is a must. I met with client’s every day to discuss planning for long-term care.

Retirement Advice from Warren Buffett

There are probably very few investors in the world who are better known or more successful than Warren Buffett, so he’d be a good one to take retirement advice from! According to the Motley Fool, at a shareholder’s meeting, Mr. Buffett was asked by a participant how to invest their retirement savings.

According to Buffett, when people retire, they typically have to shift their thinking in quite a few ways. One common challenge is making the switch from accumulating money to living off the money they have saved. This can involve changing a lifetime of habits and attitudes. This transition is an important part of being a successful investor. As you seek to find the right balance between security for the future and the enjoyment of life in the present, you will find it easier if you’re confident that you aren’t making big mistakes.

Buffett believes:

• “It takes a handful of great decisions to get you on the right track — and paradoxically all it takes is a few terrible decisions to ruin your success.”
• “Treat every investment decision as a major one, and make each one very carefully, as if you will have to live with it forever.”
• “Individual stocks often fail despite all intentions and expectations. But there has never been an index fund that failed permanently.”

If you are at the stage of your life where you are saving for retirement, you should of course do your own research, and then meet with a financial professional to help you formulate a stable retirement plan.

Need Retirement Planning and Long-term Care Advice?

Look no further! For over 30 years my law firm and I have been providing clients with caring and compassionate legal services designed to ensure that their wishes will be carried out when they die, and that their assets are protected from the catastrophic expenses of long-term care. Over the years, as we have all grown older (sigh!), more and more clients of ours have needed retirement planning advice and long-term care financial service in addition to legal services. Because of this need, for the past 10 years or so, I have also been offering specialized elder-focused financial services including retirement planning and financial Planning for clients looking for the best ways to pay for long-term care if and when needed. Through my company Lifecare Financial Services, I work with several of the top retirement planning professionals in the country to help client’s achieve their retirement goals.

Here at the Farr Law Firm and Lifecare Financial Services, we stay on top of the strategies you need to put in place to keep yourself and your family protected. If you’ve not done Retirement Planning, Estate Planning, or Long-Term Care Planning (or had your documents reviewed in the past 5 years – or last 3 years if you’re over 65), or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please call us to make an appointment for a consultation:

Fairfax Retirement Planning: 703-691-1888
Fredericksburg Retirement Planning: 540-479-1435
Rockville Retirement Planning: 301-519-8041
DC Retirement Planning: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.