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August 24, 2022

Are You Planning for the Longest Vacation of Your Life - Retirement?

Summary and Key Points 

  • It is beyond important to have a plan for the longest vacation of your life - retirement.
  • To achieve your goals and have the retirement of your dreams, you must research, plan, and budget for your future.
  • A Self Directed Checkbook IRA can help you achieve a truly diversified portfolio by giving you teh power to invest in alternative assets in real-time.
Couple on the beach looking at the water relaxing after they successfully planned their vacation and retirement.

Many of us look back at the summer with fond memories of fun vacations and time spent with family and friends. We often enjoy it so much that we cannot wait for the summertime to come next year so we can get back out in the warm sun and have some fun. However, no matter how much you desire to be spontaneous, the most memorable summer vacations do not happen by pure luck. They require a lot of research, planning, and budgeting. In fact, the more you prepare the more likely you are to meet or even exceed your expectations. 

With that said, it is surprising to find out that more than one-third of Americans - 37% - feel unprepared or unsure if they are on track for retirement, according to The 2022 BlackRock Read on Retirement. There has also been a decline in confidence of being on track for retirement among those participating in a workplace retirement plan, decreasing from a peak of 68% in 2021. With the uncertainty of the economy following the pandemic, it is now even more critical to have a plan for the longest vacation of your life – retirement.  

Retirement accounts, such as a Self Directed Checkbook IRA and 401(k), and the tax-advantages they provide were created to encourage Americans to save for their future. This way, they can feel more confident and secure as they approach their retirement. 

Here are 5 steps you can take to be as prepared as possible to achieve the retirement (or vacation) of your dreams.

1. Research Where You Want To Go

When planning a vacation, the first step is to plan exactly where you would like to spend your time off. Are you looking to go on an adventurous trip to a new country or possibly a more relaxed visit to the beach or local museum?  

Similar to planning your vacation destination, you should also take time to consider where you would like to spend your retirement years. Would you like to be in the mountains or on the water? Live simply or have a luxurious lifestyle? Near family and friends or somewhere secluded? 

How To Take Action:

  • Prioritize and Set Financial Goals
Business professional woman sitting at a desk looking at papers and her laptop setting her financial goals.

Set specific, measurable, achievable, relevant, and time-bound goals. For example, assume you would like to retire in the next 5 years and need approximately $1.2 million to retire comfortably in your desired retirement location. If you currently have $850,000 total from all of your income streams (e.g., rental income, investment income, earned income, pension, etc.), you will still need to earn another $350,000 before you can retire.

To reach your goal, you may decide to work a few more years, adopt a more aggressive investment strategy, cut back on unnecessary spending, and downsize to a more affordable home.

  • Calculate Your Average Expenses

As you think about your ideal life in retirement, it is also important to consider your ability to cover all related costs. For example, you will have ongoing expenses like taxes, insurance premiums, medical care, utilities, and upkeep of your home. It is also important to consider any additional expenses you will incur once you retire such as travel expenses, luxury items like a boat or second home, gifts for grandchildren, and any other bonus perks you would like to enjoy during your golden years. Knowing your average yearly expenses will be beneficial when setting financial goals. 

2. Create Your Itinerary

The next step in planning a vacation is to figure out exactly how you would like to spend your time off. Do you want to have jam-packed activity-filled days? Or would you rather spend it quietly relaxing under the sun? 

Just like a vacation, planning for retirement also requires you to think about how you would like to spend your time. We have all said things like “When I retire, I’m going to play golf every day,” “I have a long list of books to read when I retire,” “I’m going to use my time in retirement to travel to places I’ve never been before,” and “I’m finally going to complete my bucket list when I retire.”  

Although it is great to speak about what you look forward to, these claims do not add up to the time and effort required to plan your retirement. Some believe that they will naturally move into a life of relaxation, free of the worries of work and other stresses. However, your dream retirement cannot be achieved without diligent planning and the earlier you start, the better.

How To Take Action:

  • Decide on an Investment Strategy with a Financial Advisor
Couple meeting with a financial advisor to discuss an investment strategy and opening a Self Directed Checkbook IRA account.

Speaking with a financial advisor can help put you on the right track to meet your retirement goals. Together you can make decisions such as what types of assets you will invest in and what type of account is best suited to hold these investments.

Try to be open-minded to advice as well as different portfolio allocations and strategies. Analyze your risk tolerance and see what types of investments make the most sense for your financial situation. 

Most advisors recommend investing in a variety of assets to achieve a diversified portfolio. A truly diversified and balanced portfolio has both standard assets (stocks, bonds, and mutual funds) and alternative assets (real estate, cryptocurrency, precious metals, promissory notes, and more).  

However, many investors are unaware of the ability to invest in alternative assets with their retirement funds since most standard brokerages do not offer these products. Speak with a financial advisor and Self Directed IRA Specialist to see how you can benefit from purchasing alternative investments with a Self Directed Checkbook IRA. 

Infographic of a diversified portfolio with private equity, real estate, standard assets (stocks, bonds, mutual funds), gold, and hedge funds.

3. Book Your Trip

Once you have chosen where to go and what to do on vacation, the next logical step is to book your trip! Similarly, after you have established an investment strategy and decided what assets to invest in, you are now ready to create your retirement account!

How To Take Action:

  • Decide Which Company is Best for You
Woman in a business meeting looking back at the camera and smiling.

Depending on your investment strategy, different companies are better suited to meet your needs. One of the most telling places to see if a company will fit your needs is their client reviews. Broad Financial is proud to provide a streamlined process, a flat-fee schedule, and the best customer service in the industry. Check out Broad Financial’s reviews.

  • Choose the Right Retirement Account Type

The type of retirement account you choose often depends on the type of assets you are looking to invest in. If you would like to invest outside of Wall Street to achieve true diversification, you would open a Self Directed IRA account.  

To get even more specific, let’s assume you would like to invest in a real estate rental property because you wish to add a stable, reliable income stream to your retirement savings. A real estate rental property investment involves many transactions such as receiving rental income, paying for repairs and other expenses, and signing contracts. Therefore, it would be in your best interest to open a Self Directed Checkbook IRA since it allows for real-time investing.  

On the other hand, assume you would like to invest in a more passive alternative asset, such as a private company, a standard Self Directed IRA would do the trick. 

4. Pack and Prepare

Now that you have selected a location, planned activities, and booked your tickets, it is time to start packing for your trip! Will you need to pack bathing suits and towels or winter coats and skis? It is also important to pack a few extra things in case of an emergency. Likewise, once you have opened an account and decided what to invest in, you are ready to start investing and growing your retirement savings! 

How To Take Action:

  • Open an Account and Make an Investment
A businessman stacking coins to make it look like an increasing graph to show that his real estate investment is growing. in his Checkbook IRA.

Investing with a Self Directed Checkbook IRA is simple! The first step is to open and fund your account. Complete Broad Financial’s easy online application. Simultaneously, open a Self Directed IRA account with our sister company, Madison Trust. Madison Trust is the IRA custodian and Broad Financial upgrades you to checkbook control. Fund your Self Directed IRA account via transfer, rollover, or contribution.

Next, Broad Financial will then take care of establishing the specialized, IRS-compliant LLC and all the paperwork. Then, open and fund an IRA LLC checking account at the bank of your choice to give your LLC the power of checkbook control. And direct Madison Trust to send the funds from your Self Directed IRA to your dedicated IRA LLC checking account.

Finally, the most exciting step is to invest! Simply write a check or send a wire from your dedicated IRA LLC checking account to invest. No extra paperwork or custodian involvement is required!  

5. Reach Your Destination

The last, most exciting step is to travel and reach your destination! You can now enjoy the sights and relax, knowing that you are maximizing your time away thanks to your hard work planning beforehand. 

Likewise, after all the research, planning, account creation, and investing you are ready to enjoy your retirement!

How To Take Action:

  • Achieve the Retirement of Your Dreams
An elderly couple sitting on a couch holding cups of tea, enjoying the retirement of their dreams.

You have worked hard every day and reached your goal. Now it is time to take some time for yourself and do whatever it is you have been looking forward to! Take time to reflect and enjoy the days ahead.

Conclusion: Let's Tie It All Up

While it is impossible to plan everything in life, you can take the proper steps to be as prepared as possible. Just like planning for a summer vacation, preparing for retirement requires the research of expectations and expenses, a well-thought-out investment strategy, an account that will get you there, and the investments to grow your savings. The earlier you start, the more likely you will be able to conquer life’s uncertainties and have your hard work pay off in retirement. Make sure to take these steps and pass them on to a friend so you can be prepared for the longest vacation of your life – retirement. 


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