Eight-Point Plan for Life-Long Financial Health

Most retirement-minded Americans might not see the connection between physical fitness and retirement planning, except for the fact that both can make them sweat! For too many Americans, particularly the 79 million baby boomers, the process of planning for retirement is about as appealing as exercising and getting fit; something achievable but also easy to put off indefinitely.

Physical fitness is the perfect analogy for financial fitness. Let’s face it: lots of people make excuses when it comes to the hard work of planning for their futures. IRI is committed to breaking the process down into manageable, easy-to-follow steps that can help individuals take their retirement planning efforts from “frail” to “fit” in short order. We want to convince Americans that a little fiscal effort now can pay off big in the future. Here are some easy-to-remember guidelines to help get your financial retirement health in tip-top shape:

1. Set Goals: As with any exercise program, the first step is determining what you hope to accomplish: lose ten pounds, get toned, or complete a 5K race. Similarly, a retirement plan starts with setting some basic goals. When would you like to retire? How do you plan on spending your retirement years? Would you like to travel? Where will you live? Will you take up a new hobby?

2. Warm Up: No one starts exercising without adequately preparing first. Likewise, before you jump into retirement planning, it’s important that you stretch your financial muscles to avoid some of the most common retirement “injuries.” For example, start by minimizing credit card debt, curbing excessive discretionary spending and possibly rethinking some of your current spending priorities.

3. Make a Plan: A physical fitness program starts with an individualized plan of action. Will you use free weights or machines? Will a treadmill or elliptical cross-trainer provide a better cardio workout? Similarly, you need to create a financial retirement plan that matches your specific needs, goals and resources. Begin by thinking about how much income you’ll need to fund your envisioned retirement lifestyle. Then, determine the combination of savings, investments and insurance you’ll need to get there, since Social Security won’t be enough.

4. Build Muscle: Fitness experts know the importance of giving equal attention to multiple muscle areas to get the best results. Sound financial retirement planning requires a similar approach. Make sure to establish a balanced plan that addresses the key financial retirement muscle groups: savings, guaranteed income, tax-deferred investments, stocks, mutual funds, exchange traded funds, index funds, bonds, annuities, insurance (health, life, long-term care, disability), real estate, and government- and employer-sponsored programs, if available.

5. Don’t Forget Cardio: Your health and lifestyle have a big impact on the nature and scope of your health fitness plan. Likewise, health-related issues will weigh heavily on how you structure your financial retirement plan. Therefore, when developing your retirement plan, be sure to consider how long actuarially you are likely to live in retirement, expected healthcare costs and how active you expect your retirement years to be.

6. Get a Coach: Even the fittest athletes often need expert help with their training. Retirement planning can be a complex process, so you should consider finding a qualified financial advisor. Talk to family, friends or associates who can point you to someone who has helped them. Leverage existing relationships with financial professionals – e.g., banker, insurance agent, broker, or accountant − who are qualified to provide retirement planning services or can direct you to the appropriate person.

7. Get on the Scale: Remember to monitor your progress regularly. Your retirement goals and financial situation will change over time, as will your spending priorities once in retirement. Therefore, it is important that you review your retirement plan at least once per year and make adjustments, if necessary.

8. Focus on Endurance: Retirement planning is not a 100-yard dash; it is a long-distance race. Retirement planning is a methodical, well-orchestrated effort to achieve financial security for the rest of your life. Above all, it’s about ensuring that your retirement income will endure as long as you do.

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This document was reviewed by the Financial Industry Regulatory Authority (FINRA) and was found to be consistent with applicable standards.