• Terry Herr, CFP®, CLU

Back-to-School Shopping List ~ Why Not a Yearly Retirement List?

Labor Day 2016 is in the books. The weather is starting to turn a little cooler, football returns and the kids are back in school. For me, it’s always been the kids going back to school that really marked the end of summer. Gone are the later bed times, my flip-flops and lazily sitting outside having a glass of wine and listening to my backyard chickens squawk. (No, I didn't make that up).

If you have school-age kids, starting right after Labor Day, you will be bombarded with parent/teacher conferences, emails from the school and the dreaded lists of required back to school items. Now some of the items on the list make sense to me. Pencils and pens and calculators all seem like they’ll get put to good use. But does my 2nd grader really need six different colored pocket folders? And not just any pocket folders, he needs the shiny ones with two pockets and a way to hold loose-leaf paper. And whatever happened to highlighters coming in just one color? And four boxes of tissue? Really? He’s going to use his sleeve anyway…

So all this got me thinking: did my parents go through this with me? For me, going back-to-school-shopping meant buying rummaging through my 6 brothers clothes from last year to see what fit, not supplies. If I was lucky, I might get to buy a pair of pants, a shirt or maybe some sneakers. And then they would send me to my first day of school in my new clothes and a box of new #2 pencils and a notebook. That’s it.

So what happened? Is it a conspiracy to sell more stuff? Are the schools that strapped for cash that they can’t provide basic tools to their students (the answer is yes, but that’s another topic)? And is all of it really necessary?

But rather than complain, I decided to look at the glass as half-full and ask myself this question: shouldn’t every person have a Retirement List that they go through every year? And knowing that the answer is yes, what should this Retirement List look like?

Well, as a seasoned financial planner, here is a Retirement List for you to think about at least once a year. And while the time of the year is less important, I recommend that at the same time every year you:

1) Review your current financial situation by assessing your income and assets versus your expenses and liabilities. Make a spreadsheet or sign up for our complimentary Wealth360 Platform.*

2) Determine a realistic amount to contribute regularly to your employer-sponsored qualified retirement plan, e.g., a 401(k) plan. Of course, if possible, you want to maximize allowable contributions and take advantage of the company match, if offered.

3) Make a real plan toward reducing your debt. Pay off the highest interest rate bills first and your large bills as soon as possible. Curb your spending somewhere – maybe your daily Starbucks run – and apply that to your debt. And avoid t

aking on any new debt that could carry over into retirement.

4) Consult with us or another qualified professional about your life, health, and disability income insurance policies to determine the amount of coverage for your current and future needs.

5) Review all of your investment statements over the past year. Compare your returns with the returns of major market indices – think S&P 500, EAFE International and 30-day Treasuries. Make sure you know what drove your performance. Was it one mutual fund that made up most of your gains or losses? Do you know why? If not, find out.

6) Determine how much you can expect to receive in retirement from pension plans, veterans’ benefits, or Social Security. To get an estimate on your future Social Security benefits, visit www.socialsecurity.gov.

7) Make a list of which expenses are likely to decrease after you retire (clothing, commuting, etc.) and which are likely to increase (medical, travel, etc.), and then make sure you plan accordingly.

8) Schedule a visit with us to discuss where you stand and what we see on the horizon.

If you adhere to this Retirement Checklist, you may see your savings increase as you get closer to reaching your retirement goals. And best of all, this exercise should only take you about the same amount of time as it did to do all your back-to-school shopping.

*Wealth360 is complimentary for clients with existing accounts and/or who have a financial planning relationship with Herr Capital Management, LLC

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or Herr Capital Management, LLC and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

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