Are You Financially Ready for Retirement?

Are You Financially Ready for Retirement?
Published on
June 5, 2024

Is retirement on your mind? If you haven’t looked at your retirement plan and your progress thus far, then now is a good time to take a look! Here are a few things to consider.

1. Revisit Your Purpose for Retirement

Retirement signifies a shift from working for survival to embracing life's possibilities to the fullest. And many of us (myself included!) look forward to comfortably reaching this milestone. Being able to retire means you have achieved financial independence, enabling you to pursue your interests without concerns about monetary constraints. 

To retire, though, you need sufficient savings (or "Critical Capital") to sustain yourself and possibly your partner for the rest of your lives. Critical Capital encompasses various savings like those in your 401(k) and Roth IRAs. So, as you think about what you want to be able to do during retirement. You need enough critical capital to cover your expenses like housing, utilities, and food, but what else do you plan to do while retired? Do you want to travel? Move closer to loved ones or further south to enjoy more warm weather?

2. Make a Plan to Reach Your Retirement Goals

Unlocking financial independence involves a strategic approach, encapsulated in three key steps:

  1. Define Your Critical Capital: Begin by quantifying your financial aspirations. A straightforward method involves multiplying your target annual income by 25, providing a preliminary estimate of the Critical Capital required. (I talk about this on my YouTube channel!) While this serves as a useful baseline, exploring alternative formulas can refine your calculation for a more precise projection.
  2. Assess Investment Growth Potential: Anticipate the future value of your current investments. By forecasting how your portfolio will evolve over time, you gain insight into its contribution towards your financial independence objectives.
  3. Strategize Saving Targets: Evaluate the disparity between your existing savings and the Critical Capital target. Identify opportunities to bolster your savings rate through optimizing cash flow or leveraging real estate assets. Proactively addressing this gap will accelerate your progress towards financial freedom.

3. Enlist the Professionals to Reach Your Goals

Your mortgage represents a significant financial commitment, likely the largest debt you carry, while your home stands as your most valuable asset. The decisions you make regarding your mortgage and home equity have far-reaching implications, influencing available cash flow, tax benefits and drawbacks, overall financial standing, and more.

Just like you would hire an architect to design a newly built home or hire a mechanic to replace the engine in a car, complex financial plans may require that you engage subject matter experts to help you reach your goal better and faster. This includes staying in touch with your real estate agent for consistent updates on the market and the value of your home, your certified mortgage planning specialist (me!) to help you manage your mortgage debt, and a certified financial planner (CFP).

When my team meets with you for your annual review, we take a look at your situation and ask questions like:

  • Do your mortgage and home equity strategies align with your goals for the future?
  • Should you consider adjusting your mortgage to free up more funds for savings?
  • Is a reverse mortgage something to explore now or later? 

By addressing these considerations, you can ensure your financial plans remain on track for financial independence when it does come time to retire.

I recently wrote about reasons you might want to hire a certified financial planner for Forbes Council, but the bottom line is that your CFP is like your personal CFO. They examine your situation, help you craft a plan, and then provide advisement and services to help you reach your financial goals.

Next Steps

In my role as a mortgage professional, I'm dedicated to forging a path that aligns with your retirement dreams. I work with trusted real estate agents and certified financial planners to craft a solution that helps you meet your short- and long-term financial goals.

Text me at (202) 951-8484 or shoot me an email at to set up a free initial consultation or receive a referral to a real estate agent or certified planning specialist in your area!

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