Are You on the Right Financial Track to Retire?

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 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, like a 401(k)? Or is your savings portfolio diversified, meaning you will withdraw 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 saving. However, those tax breaks can cost you down the road as you withdraw funds during your retirement. Review all 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 (CDs).
  • 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Review your 401(k), IRAs, pensions, and other retirement accounts to determine how much tax you will pay on your withdrawn funds.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. Waiting a little while can mean larger checks over the course of your retirement. Visit the Social Security Administration website to estimate how much you may get.

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

Set Your Retirement Budget

There are the basics that you should include in your retirement budget – food, gas, car insurance, and property taxes – but many retirees forget to include other important expenses. Make sure you include these items 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’ll 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’ll need them to live your ideal retirement lifestyle.
  • Emergency Fund: Health emergencies occur for virtually everyone. Can your retirement account cover unexpected healthcare costs like in-home care or relocation to a full-time care facility?
  • Family Expenses: Will you take trips to visit grandchildren or other family? Do you see yourself possibly helping your adult children through times of financial trouble? These costs 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. Sticking to this budget will allow you to determine whether you will be able to live comfortably with your financial plan for retirement as it currently stands.

Continue to Build Your Retirement Savings

If you still have time before you 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 leave 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 by phone 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?