Planning for Your Career Exit

TriCord Advisors Inc. |

This is it. You’re zeroing in on your exit. You’ve been working toward this and have a date in mind, but are you really ready? If you are looking to move on or to retire, it’s time to get specific about your plans. Here’s what you should be doing to prepare. 

Invest Appropriately and Cut Down Debt 

Many believe that the two most important things to do for your financial health when an exit is on the horizon are investing for growth and cutting down your debt. Wherever possible, maximize your 401(k), IRA, or other retirement plan contributions—and be sure to assess your risk tolerance and diversify your investment portfolios accordingly (a financial professional can help you with this!). If your exit is further in the distance, greater growth may be reasonable; while if your exit is imminent, then backing off on risk and moving toward stability may best support your post-exit life. 

Debt is the last thing that you want hanging over your head after your exit, so it’s a good idea to pay it down now. Focus on paying off high-interest loans and credit cards first and foremost, even if it means not maximizing your retirement plan contributions for the time being. Once your highest-interest debts are paid off, you can start contributing more to your retirement savings plans while paying off any other low-interest debt. Have a goal for all debt to be paid off by the time you exit. 

Determine a Budget 

By this point in your life, you probably have a good idea of the level of income that makes you most comfortable. While your income may change after your exit, it’s important to start thinking about your lifestyle and expenses now, so you can properly plan for the funds that you’ll need to stay financially secure. 

Be specific about your budget. Will you have mortgage or rent payments to make? What will the cost of living look like in your location, or are you planning to move? Are there flexible expenses that you can cut, if need be? Honing in on these details will make it easier for you to set and reach savings goals before you get there. 

Set Goals 

Even if you already have savings goals that you’ve been working toward throughout your career, it’s a good idea to revisit them and reevaluate. Did you plan for all the expenses in your exit budget or are there new and unexpected funds you’ll need? Think about some of the things you may not have planned for early in your career, like medical expenses, mortgage payments, or higher education funds for your children. 

Consider some of the life goals that you’d like to achieve. Are there destinations you’d like to visit or large purchases you’d like to make? These are things that should be built into your budget and set as specific savings goals. Over the next few years you can continue to build your nest egg while also saving for the things that you haven’t been able to do while working a full-time job. 

Establish a Legacy Plan 

Planning your budget and goals during pre-exit also provides a good opportunity to start your legacy plan. This means planning how to best utilize your resources to benefit the next generation and your community later in life and after your death. Start by creating a list of your assets and where they’re kept—this can include things like investment accounts, real estate, and insurance policies. 

Once you have your list of assets, you should think about how they would be best utilized those assets during your life and after your death. Also, think about any preferences you have for medical care to record in an advance directive. Lastly, contact an expert, either a financial professional or an attorney, to walk you through the steps of setting up your legacy plan. 

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2021 Advisor Websites.