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No matter how well one plans for retirement there will be times of uncertainty that no one can precisely predict. There’s no telling when the world would face a pandemic or when the markets would fall, or if it’ll be during one’s retirement. With all the uncertainty that can arise it is important to act early in planning for retirement. Planning for retirement well in advance is one of the first steps to success.

Review Cash Flow and Spending

Begin to track income and expenditures to understand how much savings are being added to the retirement plan each year. Depending on the results, one may need to make alterations to income and spending for a proper retirement savings plan. In general, retiring comfortably means saving 80 percent of one’s annual earnings per the number of years of retirement. A larger amount may be warranted depending on lifestyle needs during retirement. On average, individuals will spend roughly 20 years in retirement.

Review Investments in Retirement Accounts

Whether it is a 401k, Roth IRA, traditional IRA, or another investment retirement account, investments selected require review over time. As one nears retirement, it may make sense to reconsider investment options that have less risk and that offer more consistent income. The more volatile an investment the greater risk one takes with their retirement savings. Over time there may have also been certain themed investments like funds focused on leisure and travel, but if the markets have not been good in this industry, it may make sense to divert those investments to another area that will see more growth.

Clear Out Debt

When retirement hits, one’s income stream may reduce, so clearing out all debt before retirement is a wise choice. Having a mortgage, credit card debt, car loan, or other loans can significantly reduce one’s savings. If debt is going to be present during retirement, at the very least it is important to seek ways to lower the interest rate on the debt as well as factor the debt into the retirement savings plan.

Planning for retirement is essential whether times are good or uncertain. The earlier that plans are made to build retirement savings, the better prepared one is regardless of how uncertain times are.