We are often asked “Can I afford to retire?” or “Do I have the right retirement plan?” or “How much income do I need to retire?”

There are numerous retirement calculators out on the internet that can be used to estimate how much money you should save before you retire. These calculators will allow you to adjust your spending patterns, the amount you contribute to your retirement plan each year, and more. Just remember that these are mere guidelines and even the data you enter is somewhat of a guess. No one knows exactly how much you will save each year or how much it will gain in investments, but these should at least give you an idea if you are on track to retire by your preferred age.

Although these calculators help to give you a baseline, nothing replaces an actual retirement advisor. No matter if you are 25 or 50, you could benefit from working with someone with extensive knowledge and expertise in retirement planning.

If you are not on track currently, there are some things you can do to help move that in the right direction. For example, you can save more money each month, or you can change the way you invest your money to something more or less risky, depending on the situation. Try playing around with these numbers in the calculator, and you may be surprised on how big of a difference some small changes and sacrifices might make.

If you are getting close to our desired retirement age, you may also consider either delaying retirement for just a few short years or getting a part-time job during retirement to help cover your basic expenses. Many people plan to spend less money during retirement than they do now. While this is not necessarily a requirement, it is usually a good time to look at the things you spend your money on and what is really important. If you do decide to adjust your spending, it might be a good idea to start adjusting your spending patterns now. Not only will this help you to make the transition at retirement time much easier, but the less you spend now, the more you can save for retirement.

Of course, this all depends on your retirement plans. If going out to eat instead of cooking each day is one of your top goals, then make sure you account for that. If you plan to travel more during retirement, then you should consider that when making your retirement budget. It is important you find a balance between how you want to spend your retirement years and what is realistic for your situation.

A knowledgeable retirement advisor can help you determine which of the above factors are the most important to you. They can then help you draft up a retirement plan that includes goals for savings and investments.

You have probably heard people talk about diversifying their investment portfolios. You may have even received the advice to diversify your personal investments. Yet, many people don’t understand what that truly means.

Diversifying is a necessity to protect yourself in the financial world. You have surely heard the saying to “not put all your eggs in one basket.” When it comes to investments, you don’t want to put all your money into one investment or type of investment. If that investment fails or that specific stock drops in value, you are at great risk for losing most or all of the money you invested.

To diversify means to invest in multiple areas, stocks, funds, etc. That way, if one area has a large drop in value, your overall portfolio does not suffer as much because it is protected by other types of investments.

Mutual funds are basically a group of different investments (stocks, bonds, etc.). You typically do not have direct control over what is included in the fund, as there is a portfolio manager who makes decisions for the fund. There are many benefits of mutual funds, one being that it gives you the opportunity to invest in multiple areas instead of just one.

However, this does not automatically mean that a mutual fund makes you diversified. Some mutual funds are built with numerous investments all in the same sector (such as technology or healthcare). Although it is not as common as an individual stock crashing, entire sectors can drop for numerous reasons. Investing in multiple mutual funds often gives people a false sense of security. Often, there are many overlapping investments in these funds.

Mutual funds can still be an important part of your overall portfolio. We recommend working with an investment specialist to help you determine some ways you can diversify you portfolio and make the most of mutual funds.