The plan in 4 steps
|1) Build up emergency savings cushion.|
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- This is important because Joanne and Pat work for same employer.
- Stop buying individual stocks in taxable account.
- Check status of old savings bond.
|2) Tweak investments.|
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- Redirect monthly retirement contributions into no-load funds to reduce commission expenses.
- Eliminate overlap in U.S. stock funds held in Joanne's 401(k) plan.
- Tweak allocation in 401(k) to include bonds, international equity exposure.
- In Roth IRAs, buy investments not available in 401(k) plan such as inflation-linked bonds, real estate investment trusts and commodities.
|3) Consider getting life insurance.|
Tip: Read Bankrate's story, "Life insurance for different life stages." Get a quote from InsureMe, a Bankrate company.
- Look into a modest term life insurance policy that would provide a valuable buffer in the event tragedy strikes.
|4) Re-evaluate retirement goals in a few years.|
Tip: Read Bankrate's story, "How to tell if you're on track."
- Dream of retiring at age 59½ is attainable if savings discipline is maintained.
- If retirement goals change, consider working longer to save more.
- A modestly priced vacation home is within reach.
This report was prepared by Bankrate Senior Financial Analyst Greg McBride, CFA.
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