The First Step to Retirement Planning is Understanding Your Financial Situation

Basic Retirement Tips, Participant Resources, Starting Out

You know retirement planning is important and you want to take the necessary steps to make sure you’re financially set up for your retirement years. But how do you get there? Where do you start?

The first step to retirement planning is to make sure you understand your financial landscape.

So what exactly does financial landscape mean? In the broadest sense of the term, financial landscape describes all your money coming in and all your money going out.

You can think about your financial landscape as being composed of the following:

  • assets

  • opportunities

  • plans

  • applications

Assets (any resource that you own that should provide a future benefit) alone do not make up a financial landscape—we are all too close to our obvious assets to understand true potential. For now, take a moment to explore and reflect on whether or not you have any of the following important items in your financial landscape:

Do you own a house or any other real property?

  • Do you have a car, boat, or recreational vehicle that is rarely used?

  • Do you have an inheritance or perhaps one awaiting you from a trust or will?

  • Do you have life insurance with a cash value or an annuity?

  • Do you or your spouse currently have an IRA?

  • Do you have money in a current or converted employer’s retirement plan: 401(k), 403(b), 457, etc.?

  • Do you have a pension from a denomination or organization?

  • Do you know the most opportune time to access your social security?

  • Do you regularly have a tax refund? What can you do with this refund?

  • Are you currently receiving any additional income such as alimony, side business, or social security while you are over 65 and still working?

  • Do you have a job currently, or are you willing to work?

  • Is your spending prioritized? Has it been reviewed and evaluated?

What Are Your Spending Patterns?

It is critical to understand your spending patterns because there is often “hidden spending” that we overlook or minimize its impact. Gift giving and dry cleaning are two of those hidden expenses. Often you discount their drain on income and do not recognize that the few hundred spent each month on these “necessities” are diminishing your ability to pay off debt or maximize your savings.

Your Saving Opportunities

It is important to realize that while you are in your earning years, when your ministry organization or employer offers a retirement package or plan, opt in immediately. However little you contribute, it will be strategically important for you and your family when it comes to “living” and enjoying your retirement of meaning and purpose.

Debts, Liabilities, Skills, and Capabilities

Your financial landscape also includes your debts and liabilities plus your skills and capabilities. Your liabilities—what you owe—is important because it restricts your choices and limits your options. Your liabilities create a barrier to moving forward and putting your Future Funded Ministry into motion.

Liabilities create a psychological barricade keeping you from wrapping your head around your Future Funded Ministry and what it should look like. On the other hand, your talents, skills, and experiential learning capabilities form an important foundation for your financial landscape. This is your capacity to create value and thus to produce sustainable assets and usable resources. Simply stated, you will have more money.

We can’t grow what we don’t have like a victory garden during WWI. Fruits and vegetables were at a premium. Victory gardens provided nutrition and hope. Each of us has the comparable capacity, yet few of us fully use it. The good news is that God has prepared you for a future of service and will not withhold the ability to create it, to fulfill your Future Funded Ministry calling.

Easy Keys to a Sound Financial Landscape

Here are some important tips to help you set up your financial landscape:

  • Live on what you make.

  • Put a plan in place for getting out of debt.

  • Understand how you and your spouse view money and make financial decisions. This is critical to both your planning and execution of the plan.

  • Create a retirement plan and choose the investment vehicles that are most applicable to your risk profile, age, remaining time to retirement, money personality, and savings approach.

Your Financial Landscape Defined

In a nutshell, the assets you have, plus your on-going earnings, minus your current debt-level, along with the approach and plans that you and your spouse are creating together compose your financial landscape.

Each of us has a financial landscape. Now is the time for you to acknowledge what it is, develop alternative action plans, and take charge of your future.

Now that you understand your financial landscape, begin, or continue, saving for retirement with these important steps.

Are you a Ministry Leader?

We have some great ways to promote Biblical Financial Stewardship to your staff.

To explore this, connect with us.