Within this article, we will delve into 8 retirement practices to help you create a retirement plan. The content is impersonal. It does not constitute a definite, nor personal, solution for one individual. Instead, it serves as a model that may be used. 

Whether you’ve yet to develop a retirement plan, or already have a portfolio, this content can serve a reference point to keep you on track. 

While reading this guide, you’ll find additional articles linked underneath each subheading. This content relates to the topic, intended to assist your exploration. 

The first step is to ask yourself this question, “What is my ideal vision for retirement?”


#1: What is my Ideal Vision for Retirement?

Identifying a retirement goal is half the battle. 

“A goal properly set is halfway reached.”-Zig Ziglar. 

Most future retirees will tell their Investment Adviser that they’d like to “retire comfortably” or “continue their current lifestyle”, but these concepts seem vague, right? 

We want our retirement visions to be as clear as possible. A clear vision will enable us to develop the necessary milestones that we can strive for daily, monthly, or even annually. 

You might conceptualize traveling the world, living abroad, or purchasing those toys that you’ve held off on for so long. After working for many years, you deserve to have those things, right? 

The point of this best retirement practice is to dream. What is your ideal vision for retirement?  

Don’t be afraid to dream a little bit. After all, your goals should be a stretch. However, they should also be practical, depending on your personal finances and career choice. 

It’s important to not undermine this process.


#2: When do I want to Retire?

Now, you should consider the following question, “When do I want to retire”. 

Frankly, this can be a difficult decision to make if you’re a way off from retiring. If you’re closer to retirement, perhaps not. However, this decision might be a trade-off between work and leisure time. 

You might want to give up the wages and salary income that you’d receive from working longer. If this is the case, your retirement savings must stretch to cover a lifetime’s worth of costs. 

Do you want to retire early? Do you think you can afford to do so? Or, are you anticipating having to work longer? 

There are many variables involved in retirement planning. It may feel overwhelming. However, it’s important to consider your financial matters from a realistic point of view. 

Decide on a set date. It may change, but for the moment, it will help you set your milestones. 

Additionally, keep in mind that your pension and Social Security distributions will vary depending on your planned retirement date.


#3: What will my Retirement Cost?

Once you have a retirement vision and a date to begin, you should estimate the cost to achieve your goal. How much will you need to satisfy your goal? 

Try to be overly generous in your estimates to account for inflation, taxation, and all the stuff you might forget. Round up where you can and try to include all the expenses that you can reasonably expect throughout the duration of your retirement. 

This number won’t be completely accurate, but it’ll provide you with a starting point. Here are some things to consider.


  1. Housing.

You might be close to paying off your mortgage, if you haven’t already. Housing is the biggest spending category for all age groups. In fact, your monthly expenditure might include property taxes, insurance, utilities, repairs, maintenance and household supplies. 

According to Nerd Wallet, the average cost is $1,322. 

2. Transportation.

Transportation is an expense that might decrease, but should still be accounted for. This includes costs of gas, insurance, maintenance and repairs. 

The average cost is $567. 

3. Healthcare.

Insurance premiums could also be a hefty retirement expense. In fact, Nerd Wallet reports over $4,000 a year on average for the 65-plus set. 

4. Food.

Can’t forget food. It’s a necessity. 

5. Entertainment.

With an abundance of time at your disposal, you might want some entertainment. Consider this one at your personal expense.


#4: How much Should I be Saving?

Now that you have a cost in mind, how much should you be saving to fulfill your goal?  

The below four steps may help simplify the process: 

  1. Add your estimated Social Security and defined benefit pension payments together based on your anticipated retirement date. 
  2. Calculate your annual income and estimate expenses. 
  3. Subtract your expenses from your income. 
  4. The difference will be your income surplus. 

Our goal is to identify any shortfalls in our savings projections. For example, your Social Security and your pension may not be enough to satisfy your retirement vision. Your income surplus would be used to make up that shortfall.


#5: How do I Build a Savings Plan?

Once we’ve identified a shortfall, subtract your current savings and balances to determine your current savings shortfall. Take that number and divide it by the number years until you reach your expected retirement date. 

You now have an annual savings objective. However, if your savings objective seems unrealistic or intimidating, you may decide to revisit your retirement vision. You might have to settle for less or a find a way to save more. 

There are no right or wrong answers. For example, some people may be happy with $30,000 per year, while others may need $100,000.  

Decide what is best for you.


#6: How do I Invest the Savings?

Choosing which investments to make can be a tricky decision. The multitude of options can leave you dumbfounded and frankly, the number of investment companies to choose from can leave you even more indecisive. 

Let’s start by identifying your risk-threshold. Many investments carry higher risk levels than others and deciding where you belong can help you filter through the available investment options. 

If you are frightened of losing your hard-earned money, perhaps a more conservative investment, with a decreased amount of risk, is appropriate. 

If you’re a risk-taker in pursuit of possibly higher returns, perhaps a riskier investment would be appropriate. 

Again, this is dependent on your personal finances.  

To avoid performing the research yourself, locating an Investment Adviser firm to assist you can help mitigate many complications that arise from lack of expertise. An Investment Adviser is a legal entity of Registered Fiduciaries; fiduciaries are obligated, by law, to deliver duties of good faith and trust when it comes to investing client money.


#7: How do I Maximize Tax Benefits?

If you’re seeking to make up projected savings and cash shortfalls, it might be appropriate to consider a government sponsored retirement plan. For example, 401(k), SEP, IRA, and other retirement plans are designed to help you save money.  

Qualified retirement plans can minimize the savings burden. In fact, you can also get your employer to pay part of your savings cost if they offer a 401(k) matching contribution plan. 

Let’s review a couple. 

  1. 401(k): This type of plan is offered by many private sector employers. Currently, the basic employee contribution limit for 2019 is $19,000. If you’re age 50 or older and have already contributed the maximum amount to your 401(k) during the current year, you may make an additional $6,000 catch-up contribution. These plans post pone taxation until after you begin taking distributions when you retire. Thus, lowering your tax liability in the present. 
  2. 403(b): This plan is similar to the 401(k) plan, containing the same limits. However, the 403(b) is generally offered to state employees and non-profit employees.  
  3.  IRA: Instead of being offered by employers, the Individual Retirement Account can be opened if you have earned income. You can open this on your own without the need for an employer to provide you with the plan. However, the contribution limit is lower with the IRA, capped at $5,500. 

Ultimately, the weakest link in the savings process is you. Therefore, using a retirement account with withdrawal penalties will help instill discipline into your savings plan.


#8: How do I get Started?

Don’t procrastinate. The sooner you develop a retirement plan, the sooner you can begin taking steps towards fulfilling your retirement dream.  

Consider your retirement goal and decide whether a professional would be needed. After all, an Investment Adviser Representative could help you form a comprehensive portfolio that utilizes several tools to build your savings. 

For example, Oxley Capital Management uses more than 70 unique strategies when building portfolios for clients. OCM also considers a variety of investment options. Whether you’re risk-adverse, more liberal, or a risk-taker, they can serve clients of all demeanor.

Check the background of John Oxley, or an OCM representative, on FINRA’s BrokerCheck.

OCM|Oxley Capital Management, LLC 2018

601 Townbank Road, North Cape May, NJ 08204


This content does not serve any representation as to the suitability nor appropriateness of any security, financial product, nor instrument. There is no guarantee that investment into any program discussed herein will be profitable or will not incur loss. This material does not have regard to the specific investment objectives, financial situation, nor needs of any specific person. You should seek financial advice regarding the appropriateness of investing in any investment strategy discussed or recommended in this report. You should note that security values fluctuate and that each security’s value may rise or fall. Consequently, investors may receive back less than originally invested. Past performance is not a guide to future performance. Investing in any security involves certain systematic risks, including, but not limited to, market risk, interest-rate risk, and inflation risk. These risks are in addition to any unsystematic risks associated with an investment style.

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John Oxley is an Investment Adviser Representative of Oxley Capital Management: a Registered Investment Adviser. OCM is registered in NY, MD, VA, and contains their principle office in NJ, located at 601 Townbank Road, North Cape May, NJ 08204.