TIME Retirement

5 Tips for Preparing for Retirement

Roger W. Ferguson, Jr. is the President and CEO of TIAA.

Make sure to have a plan

If you’re like most American workers, you’re looking forward to enjoying a happy, active and secure retirement someday.

But if you read about the state of retirement preparedness in America these days, it’s easy to get discouraged.

The U.S. Senate has pegged the difference between what people have saved for retirement and what they should have saved at more than $6 trillion. The Federal Reserve has estimated that a third of American workers have nothing at all saved for retirement. As people live longer but save less for their retirement, this has been called one of the defining challenges of the 21st century.

But rather than dwell on what people are doing wrong, I think we should celebrate and learn from what millions of people are doing right.

TIAA recently conducted a survey looking at our customers’ lives in retirement. We found that 93% of them are satisfied in retirement in general, and 86% are happy with their financial health. In fact, they are actually more satisfied than respondents were when we did a similar survey 30 years ago.

So, what are the secrets of well-prepared retirees? Everyone’s situation is different, of course, but as I’ve talked to various individuals over the years, there are several steps that many of them followed.

First, have a plan.

Getting ready for retirement is more than just putting money away. You should develop a long-term strategy – a well-thought-out plan based on your own personal definition of success, what you hope to do in retirement, and where you are today. This plan will help you determine everything from your savings strategy to your hobbies and activities.

Second, diversify.

Invest in a mix of different kinds of investments: U.S. and international stocks, bonds, real estate, and guaranteed investments. This gives you the best chance of weathering whatever happens in the market, because different types of investments tend to rise and fall at different times, to different degrees. Once a year, do a checkup on your portfolio to be sure you are still invested in a way that suits your goals, the time left until you retire, and your comfort with investment risk. And don’t let short-term market volatility make you lose sight of your long-term goals. Remember, historically the stock market has recovered from slumps over the long term.

Third, plan for lifetime income.

As average life expectancy hits all-time highs, today’s investors need to recognize they are likely to be retired far longer than previous generations. That means making sure you will have a steady stream of income in retirement that lasts as long as you do.

Yet too many people focus only on the amount they have saved – striving for some “magic number” that may or may not be enough to support them throughout a long retirement. With a declining number of employers providing traditional pensions, today’s workers should explore alternate avenues for a guaranteed income in retirement. Done right – with low fees and flexible income options – an annuity can be a source of steady income that you can never outlive.

Fourth, prepare for the emotional side of retirement.

Ensuring that you are ready financially is essential. But preparing for transitions in relationships, activities, health and giving back is also central to a happy retirement. In TIAA’s survey, for example, those who shared their vision of retirement with their spouse had an easier transition into retirement. People who participate in more than 10 activities were also more likely to be very satisfied with their retirement, so it’s important to begin thinking about the passions you’ll pursue once you have more time.

Finally, talk with a financial advisor.

You don’t need to do this alone. In fact, you shouldn’t do it alone.

The average person – even a highly educated one – can be stumped by articulating a savings strategy and choosing investments to get there. Too often, people just pick funds with the best performance over the past year or five years – which is no indication of future performance. Or they rely on financial advice from a friend or relative whom they think has the expertise. Some are so overwhelmed they avoid making any decisions at all.

So, while it’s important to continually improve your own financial education, it’s even more important to seek out the advice of a trusted expert – one who puts your best interests first. An advisor can help you define your goals, make a plan and stay on the right path to lifetime financial well-being.

Perhaps the most important tip of all is this: There’s no time like the present to take the first steps toward achieving your own definition of retirement success. So, call an advisor and get on the right path to planning for a happy, active and secure retirement.

The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results. Diversification is a technique to help reduce risk. It is not guaranteed to protect against loss.

The 2016 Voices of Experience survey was conducted by GfK Custom Research North America among a total of 1,583 TIAA retirees between May 28 and August 27, 2015. To qualify, all respondents had to indicate that they are retired. Respondents were mailed the survey questionnaire and had the option to return the survey by mail or to complete the survey online. Respondents completed 104 surveys online and 1,479 by mail. The sample was provided by TIAA, and data were weighted by gender, age, region, engagement, and industry sector.

This article originally appeared on LinkedIn

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