You are standing at a critical point. From a planning perspective, time isn’t on your side. But don’t allow a sense of urgency to destroy your position. Pushing the envelope with aggressive investing won’t help you here. In fact, studies show that sequence of returns is vital at this point. Studying sequence of returns demonstrates how a large loss in an investment portfolio at or near retirement can likely be a critical blow to a retirement plan. In other words, what you need to remember is if you are within five years of retirement, you should not be taking much risk in your portfolio. If you’re behind, you should probably push back your retirement age to allow for a better probability of success.
The majority of your estate planning should be done, and all of your children or beneficiaries should be aware of your intentions. You want to avoid your family being surprised after you pass away. If you don’t want your beneficiaries fighting over your money while you are alive, then don’t make them fight over your money after you die. You should have separate conversations with each beneficiary about personal items they may want, then write them down. Family heirlooms, sentimental items—it’s all worth a discussion. Talking about these things is not taboo. I have seen too many families destroyed over contesting wills, and who gets Grandpa’s diamond ring. Death is tough enough to deal with as it is.
Planning is critical. Yet doing the right kind of planning is essential to producing a high probability of success in terms of achieving your goals. There is no quick way to complete a comprehensive plan. It takes a qualified planner an average of 20 working hours to complete. This requires a fair amount of work on the client’s part, too. If a planner asks you to collect every single financial document you have, organize them, and submit them in a clean and concise manner, how long would it take you? This is your first assignment.