Are You on the Right Financial Track to Retire?

Retired couple riding bicycles

You have been saving toward your retirement for years and have used dozens of retirement calculators to keep you on track to meet your financial goals. But, before you set your retirement date, take a few minutes to consider whether your finances will truly be ready.

By walking through the following steps, you can help to ensure that you are  financially prepared to live off of your savings for the rest of your life.

Understand How Much Money You Really Have

Knowing where all of your income will come from during retirement is key to creating your budget. Do you have only one retirement account in the form of, for example, a 401(k)? Or is your savings portfolio diversified and will you be withdrawing assets from IRAs, 401(k) accounts,  high-yield savings accounts,  and CDs?

The appeal of many retirement accounts is that they offer tax benefits while you are actually saving. However, those tax breaks can cost you down the road as you withdraw funds during your retirement. Review all of your accounts to bring to light  how much money you really have:

  • Traditional Accounts: Add up all of the money you have in your checking, savings, and  money market accounts, as well as any certificates of deposit.

  • Retirement Accounts: Review your 401(k), IRAs, pensions, and other retirement accounts to determine how much tax you will pay on your withdrawn funds.

  • Investment Portfolios: Without projecting what you think your account will do in the future, evaluate its current market value.

  • Social Security: Decide when you will really need to receive Social Security benefits as waiting a little while can mean larger checks over the course of your retirement.  Visit the US Social Security website to estimate how much you may get.

The average American’s life expectancy is up to almost 79 years of age.[i] You will have to plan for your retirement savings to sustain you through that age,  at least. As you begin to build out your budget, make sure that you have set aside funds to last you well into your 90's.

Set Your Retirement Budget

There are the basics that you should of course include in your retirement budget – food, gas, car insurance, and property taxes – but many retirees forget to include some very important expenses. Make sure you have these items included in your annual budget:

  • Leftover Debt: Will you be completely out of debt by the time you retire? Car and mortgage payments can hold you back. Aim to have most of your debts paid before you retire. For instance, it may be worth it to work another year if it means living mortgage free.

  • Health Care: Calculate the costs of using supplemental plans that extend beyond your Medicare benefits. If you are retiring early, you will need to cover 100 percent of your insurance costs.

  • Having Fun: The first few years of your retirement will probably be your most active. Be sure to calculate for higher activity and traveling expenses if you will need them to live your ideal retirement lifestyle.

  • Emergency Fund: Health emergencies occur for virtually everyone. Can your retirement account cover such unexpected healthcare costs as in-home care or relocation to a full-time care facility?

  • Family Expenses: Are you going to be taking trips to visit grandchildren? Do you see yourself possibly having to help your adult children through times of financial trouble? Costs such as these can throw off your entire retirement budget.

Double Check Your Math

If you think your budget is ready and you are prepared to retire,  try living on your new budget for six months.  You may be driving fewer miles when you retire, but there shouldn’t be big changes in your expenses otherwise. Sticking to this budget will allow you to determine whether you would be able to live comfortably with your financial plan for retirement as it currently stands.

Continue to Build Your Retirement Savings

If you are among those who still have a little while to go before they can leave the workforce, consider  diversifying your retirement savings  to make the most of your money. Look into placing your funds into a high-interest savings account so that funds other than those in your 401(k) or IRA can start to earn interest.

Saving for your retirement will be an ongoing process, even after you have left the workforce. You should consistently reassess your portfolio to ensure that you are keeping up with inflation rates and maximizing your savings potential.

At UFB Direct, we offer multiple high-yield savings options that can help you prepare for your retirement. If you would like information about these savings options, please contact our courteous  financial specialists  today by telephone at  877-472-9200  or by email at

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[1] “Mortality in the United States, 2015”,, DEC 2016

Are You on the Right Financial Track to Retire?