6. Know your net worth. To determine your net worth, take an accounting of what you own and subtract out what you owe. You are then left with what's yours, a measure known as your net worth. It's common to build wealth during your career and start tapping that wealth in retirement, or to meet other life goals.
You don't need a daily balance sheet, but tracking your net worth on a regular basis gives you a sense of whether or not you're building wealth. Bankrate's "
Net Worth Calculator" is an interactive work sheet that will help you calculate your net worth.
7. List your accounts. Keep a current listing of your bank accounts, investment accounts, life insurance policies and pension information. Of course, it's important to keep a copy of your will and a note stating where an original copy of the will is available. Make sure somebody knows where you keep the list -- and don't keep the list in your safe-deposit box, where it is not easily accessible.
This list will be invaluable to your family if you become incapacitated or die. They'll have enough to deal with without trying to piece together the puzzle of your finances. If you already have a list, take the time to review and update it to keep it current. 8. Estimate your retirement nest-egg needs. Hoping for the best doesn't cut it here -- you need a sense of how big your investment portfolio should be at retirement. The three-legged stool of a pension, Social Security and retirement savings has gotten a bit wobbly.
If you construct a spending plan, use the total annual expenses as a guide to what you might need in retirement. Financial advisers recommend different things here. Some say you need only 75 percent of these annual expenses in retirement because you're not commuting to work, buying work clothes, etc. However, other advisers recommend budgeting for a full 100 percent because your retirement hobbies and travel will take up any slack. Bankrate's
Retirement Calculators can help you determine the size of an appropriate nest egg by weighing how much you have already put aside, looking at your pre-retirement savings goals and estimating your income needs in retirement.
If you're late to the party, don't throw up your hands and say there's no point in starting to save for retirement. Every dollar you put aside today will work toward funding your retirement. The dollar spent today won't help at all. 9. Bonus item: Be a part of your community. Everyone wants to live in a great community. But it's people -- not houses -- that make a community great. Be a better person and you get a better community. Volunteer your time and get involved in your community. You'll make a difference and feel great doing it.
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