Planning for Retirement 10 Years Ahead

I’m age 55. How should I be planning for the next 10 years?

As Black female professionals, how do you plan for your retirement while shouldering your responsibilities as financial and emotional pillars for your families and communities? What can you do to get your financial life under control?

Having a robust, detailed plan is key. It can make all the difference in understanding the cash flow needed to support your lifestyle and building a retirement with enough money to live comfortably.

To tackle this successfully, it is essential to work with someone who understands the unique cultural nuances around your priorities and family commitments and can develop an appropriate road map for you.

With these nuances in mind, a client said to me “I’m 55. How should I be planning for the next 10 years?” Here are some of the considerations we discussed:

1. Cash flow

How much will you need in 10 years (or upon retirement)? This is where you need to focus and determine what your monthly income needs will be. I have projection calculators to help you with this. You may find through this exercise that you need to pay off major debts by retirement age.

2. Monthly savings

With your future cash flow needs in mind, should you be saving more each month? One of the strategies you can use is to max out the funds you contribute to your retirement account.  For 2025, it is $23,500 with a catch-up provision for those over 50 of $7,500.

3. Portfolio allocations

Are your investments aggressive enough to meet your cash flow needs in 10 years? People may have a goal to at least double their investments every 10 years. The average return of the S&P 500, which tracks the 500 largest publicly traded companies in the U.S, over 25 years has been approximately 10%.  Based off the Rule of 72, with an average return of 10%, your portfolio would have doubled at least twice.

4. Housing

Should you think about downsizing now?  One of our largest debts can be our mortgage.  You may consider reducing or eliminating this major debt prior to retirement. This can be done by making additional principal payments using bonuses and cost of living increases.

5. Social Security

This is a good time to obtain your Social Security statement to determine your monthly amount at ages 62, 67, or 70. A major consideration is longevity.  How long do women live in your family?  Are there specific illnesses that run in your family? Are your savings on track to cover taking Social Security at age 62 or any shortfall resulting from governmental policies?

6. Tax planning

Are there tax considerations I need to evaluate prior to retiring, such as Roth conversions?  Possibly. One consideration is it allows you to transfer assets into a vehicle that minimizes mandatory required minimum distributions that can force retirees into higher tax brackets and pay more in taxes.

7. Insurance

What insurance and how much should I consider that fits into your plan?  Life, long-term care, health, automobile and property are all insurances that should be reviewed to see if they still meet your current needs.

8. Estate protections

Have you checked or updated your estate documents?  Some documents to review are your trust and who you’ve identified as your successor trustees and the second being your beneficiary designations.

9. Aging

Do you have a plan for aging? Is long-term care a major consideration to supplement your health care needs?  The younger you are and the fewer health issues you have can affect the cost of insurance. A useful strategy is to use your health savings account to pay for long-term care premiums. If you wish to age in your home, what do you need to do to prepare your home to meet your future needs.

A detailed and relevant financial plan can replace fear with confidence when it comes to looking towards the future. There are a lot of moving parts when it comes to retirement – taxes, monthly expenses, income sources, total assets, liabilities, and scenario planning based on expected major purchases and specific goals.

Don’t get overwhelmed. Contact me and I will be your guide. 

Click here to start the conversation with Harris & Harris Wealth Management.