At Cochran Bell Wealth and Tax Strategy, March is one of our favorite times of the year. Our office gets swept up in the excitement of March Madness—filled brackets, buzzer-beaters, and spirited debates over which team has the grit to go all the way. But while we love following the road to the Final Four, we’ve noticed something interesting: retirement planning has a lot in common with the tournament.
Just like a basketball team needs preparation, strategy, and focus to reach the Final Four, you’ll need a game plan to make sure your retirement years are a slam dunk. And just like you can’t wait until the day of the championship game to start training, you shouldn’t wait until your last day at work to think about your financial future.
So, what should you be doing in the four years before you submit your retirement paperwork? Here are key moves to consider when it’s time to leave the working world behind:
Year One: Review Your Game Plan
A winning team starts with a strategy, and so does a successful retirement. In the four years leading up to retirement, it’s time to take a close look at your financial “playbook.” Review your retirement accounts, Social Security benefits, and any pension options. Are you on track to hit your savings goals? Are there gaps in your plan that need to be addressed? This is the time to fine-tune your approach.
Year Two: Play Strong Defense
In basketball, defense wins championships—and in retirement planning, managing risk is just as important as growing your assets. Two years out, it’s a good idea to evaluate your investment risk. As retirement gets closer, many people shift their portfolio to include more conservative investments, but it’s important to strike the right balance.
This is also the time to pay down any lingering debt. The less financial baggage you bring into retirement, the better positioned you’ll be for a smooth transition.
Year Three: Practice for the Big Game
Just as teams scrimmage to prepare for the real thing, you can start practicing for retirement by “test-driving” your retirement budget. What will your day-to-day expenses look like when you’re no longer bringing home a paycheck?
Try living off your projected retirement income for a few months to see how it feels. This can help you identify any adjustments you may need to make before the real thing begins.
Year Four: Go Full-Court Press
It’s the final countdown! With just one year left before retirement, now’s the time to make sure everything is in order. Schedule a meeting with your financial advisor to confirm your withdrawal strategy, finalize your Social Security decisions, and update your estate plan if necessary.
It’s also a great time to think about what you want your retirement to look like. Do you plan to travel? Spend more time with family? Having a clear vision for your retirement years can make the transition more exciting and less stressful.
Championship Mindset
In March Madness, there’s no guarantee that your favorite team will take home the trophy, but the teams that win tend to be the ones that prepare, practice, and stay focused on their goal.
The same goes for retirement. With the right strategy, a little preparation, and a willingness to adapt as needed, you can put yourself in the best possible position to make your retirement years truly golden.
If you’d like help getting your retirement plan game-ready, we are here to coach you through it. Let’s work together to make sure you’re prepared to cut down the net when you hit your retirement goal.