Five Steps to Getting Financially Organized Before Retirement

Getting financially organized before retirement can be a daunting task. There are many unknowns and it can be hard to know where to begin. For that same reason people often wait too long to address retirement needs and, unfortunately, don’t achieve the financial freedom for which they long. When people get serious about retirement, many start by analyzing their investment account(s) (or lack, thereof). Ideally, they’ll meet with a CERTIFIED FINANCIAL PLANNER™ professional to get them on track. In this article, I’ll share with you five steps you should take to get financially organized before retirement. Spoiler alert: None of the five steps outlined involve contributing to a retirement account! Let me explain:

The first steps to getting financially organized do not involve dollars and cents.

Financial organization starts by identifying and prioritizing what is most important to you. This is a foundational financial planning concept you need to adopt in order to become financially organized before retirement. Many people skip these important steps, which comprise the beginning of a goals-based financial planning approach.

Step 1: Identify what is most important to you.
I start by asking clients to list what is most important to them and help them identify what they’d like to accomplish. Spending more time with family, traveling, volunteering, reading, relocating, starting a new business, etc. They fill in the blank. I ask that they be specific. Also in this step, I ask about primary financial concerns, where relevant, such as an aging parent, troubles with children, or debt questions.

Step 2: Prioritize what is most important to you.
Often I ask clients to sort their goals list into three columns: needs, wants, and wishes. This is where we prioritize financial goals and get a little deeper into concerns. To be clear, when I refer to goals I primarily mean non-financial things; qualitative as opposed to quantitative, such as the items listed in step 1 above. The things, people, and experiences that clients value or desire will cost money, certainly. But it is critical that we focus on the qualitative aspects of financial planning first in order to give a purpose to the quantitive side of financial planning. In other words, once we’ve identified and priortized goals, money in a retirement account will have a purpose – namely, to fund what is most important in life, as defined by the client.

Step 3: Create a budget.
This is where we back into some numbers. Here I’ll make a distinction. Planning for retirement is planning with tomorrow in mind. We start with the end, as in steps 1 and 2, and work backwords. Budgeting, or cash flow planning, works the other way around. Budgeting is today. We primarily use yesterday’s income/expense history to anticipate today and tomorrow’s cash flow. Also, our personal cash flow is where it hurts. It’s where we feel, or experience, money the most in our daily lives. This is one reason why we look at our checking accounts more often than we look at our retirement accounts. In terms of how we relate to money, we naturally focus most on our cash flow – income and expenses. Consequently, I spend a significant amount of time on budgeting in client meetings. It is time very well-spent, and is often where we provide the most value.

Step 4: Gather your financial documents in one place.
We’ve all accumulated some level of financial paperwork. Bank, investment, retirement, college savings accounts. Life, disability, long term care, homeowner’s, auto, umbrella liability insurance coverages. Wills, trusts, powers of attorney, guardianship arrangements, living wills. Student loans, credit cards, mortgage, personal or business loans. The list goes on. This usually adds up to a box or two full of papers. Most of what people save is ancillary material, and may be thrown in the trash. I ask clients to bring their box of papers and we’ll sort it all together, or they may scan and upload documents to a secure online vault to which we give them access. Once uploaded to the online vault, most of a client’s financial life is accessed under one convenient login via secure cloud storage.

Step 5: Work closely with a CFP® to pull steps 1 through 4 together.
This is where working closely with an experienced CERTIFIED FINANCIAL PLANNER™ professional is essential. In this case, a client pays a fee for unbiased, financial planning advice; no financial products involved. This is an important aspect of the fiduciary standard of client care. Some financial advisors say they don’t charge for planning advice. No one works for free. Oftentimes a financial advisor wants to sell an investment product, which creates a conflict of interest.

People hire a CFP® not only to get financially organized, but also to get peace of mind about their financial future. What’s the end result of an advice-based financial planning engagement? Recommendations given in a client’s best interests.


Jonathan G. Cameron is a CERTIFIED FINANCIAL PLANNER™ professional and co-founder of CameronDowning, a Registered Investment Advisory Firm in Miami, FL. Please connect with us on LinkedIn, Facebook, Instagram, and Twitter. Also, check out the rest of the CameronDowning website as well as our Financial Planning Videos page where we’ve created dozens of short videos answering many of your personal financial questions.

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