5 Tools to Add to Your Retirement Toolkit

Printouts listing aspects of retirement planning arrayed on with a silver-colored pen weighing them down.
(Adobe Stock)

In the middle of a golf lesson last week, the pro told me, "JJ, you need to add some shots to your toolkit." I was a bit disappointed, but upon reflection, I thought, "Wow, he's just trying to help, and by gosh, that's a good analogy." And here we are.

If retirement planning and preparation is an area of your life you are looking to build out, here are a few items you might want to add to your retirement toolkit.

1. 'Vision' Protection

In my mind, retirement planning starts with a clear vision. If you're in your 20s, this vision may be no clearer than the idea that you need to take some steps to create options and choices for your future. Obviously, the closer you are, the more concise (focused?) your vision should be.

And don't forget the non-financial stuff. Retirement is not just a stack of dough. What will you do? Where will you live? Sure, it could mean golf and travel, but it also might just mean working in a different type of environment or for fewer hours. Figure out what's important to you and create your personal vision.

2. Savings Discipline

I still remember a series of commercials from a few years back in which the main characters secured their retirement by stumbling upon a miraculous find. In one version, it was a priceless original of the Declaration of Independence stuck behind a painting bought at a garage sale.

Nice thought, but it's not likely in the real world. Instead, focus on building your own independence by saving and investing regularly. Find a balance between living today and building for the future. If you're just starting your career, setting aside 10% specifically for retirement is a nice goal. Late to the game, and you'll need to increase what you save.

3. Guaranteed Income

Create a situation that allows your recurring fixed expenses to be covered by guaranteed income. Guaranteed income could come in the form of military retirement, Social Security, pensions, or you could purchase your own guaranteed income via an immediate or income annuity. The beauty of these income streams is, they provide a resource baseline you can't outlive.

4. Retirement Portfolio

What does your retirement portfolio look like after the turmoil we've seen over the past few years? Have you built and maintained a diversified mix of equities, fixed income and cash equivalents? If not, add "portfolio review" to your to-do list, and ensure that what you've got matches up with your goals, risk tolerance and tax strategy. Speaking of ...

5. Tax Strategy

The ever-changing tax landscape makes it difficult, but critically important, to keep this tool razor sharp. And for retirement, tax diversification should be top of mind. That means saving and investing in a manner that allows you to benefit today and tomorrow through building taxable, tax-free (Roth), and pre-tax investments. And it's not just what you have, but where you have it. Be tax efficient, and you can do more with less.

No matter your plans, you'll need the right tools to get the work done. There's no better time than right now to evaluate your array of retirement gear.

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