So you are about 10 years from retirement. What should you do? What should you look at and what things will come up that you typically don't think about while you are working? There are 5 guidelines for you to look at to prepare your financial retirement.



Do you have an emergency fund? Some experts say you should hold between six and 10 months worth of living expenses. When we were younger, that seemed ludicrous. How could you save so much and be expected to eat? We had kids to raise and educate. But now, think about it. You are older. Expenses are settling down (I hope). Look at your living expenses.

While you are there, make a rough estimate of what your retirement expenses might be. You can only estimate since you aren't retired and its several years away. But you can get the general idea of what it will cost. This is step two towards planning your retirement.

Next, are you saving enough? Is your 401k beefy? If its not, its probably too late to catch the effects of compound interest. Hint for the younger readers. By the time you are old enough to save a considerable sum, time has eluded you and you can't get the benefit from compounding interest. But there's still hope. You can contribute a considerable amount into your tax deferred retirement account and when you can also take advantage of a “catch up provision”. Can you live on 90% of your current income? 80%?

Five till Five. Step 5 – 5 years to retirement. Consult your financial advisor and start looking at your options. Will your Social Security checks plus your company's retirement, plus your own retirement be enough? Can you draw just the interest? Do you need an annuity? Will you require a reverse mortgage on your home to help you in retirement? The “5 till 5” rule means its time to put things in perspective.

Lastly, if you need estate planning or “wealth transfer” strategies, contact a financial advisor or better, a financial attorney. This area gets complicated quick. You want to make sure you have plenty of money for you and your spouse, but when you pass away, will you burden your children with taxes and leave them hardly any money? Or will your favorite charity only get half of what you designate due to taxes? Life insurance can hedge this complex area, not for the sake of life insurance, but to hedge the tax issues that will arise.

I hope these guidelines can help you see what is coming. If you are younger, the trick is to put back as much as possible. Who knows if you can rely on Social Security or company pension plans. You have to look out for yourself.