Retirement Planning

<span style="font-weight: 400;" data-mce-style="font-weight: 400;">The Ins &#38; Outs of Retirement Planning</span>

The Ins & Outs of Retirement Planning

If you haven’t started planning for retirement, we recommend making it a priority. You may be eligible for Social Security benefits when you’re 67, but there’s a good chance those benefits won’t cover all your expenses. The most efficient way to save for retirement is to invest in a diverse portfolio of assets, including stocks, bonds, and mutual funds.

Retirement planning doesn’t have to be difficult or even use all your financial resources. With the right retirement plan, you can even save money on taxes, which helps you contribute more toward your retirement. Our experienced retirement planners can educate you about your different options and help you make the best choice for your situation.

Which Retirement Plan Is Right for You?

There are different retirement plans, but you may only have some of these available to choose from:

  • Employer-sponsored 401(k) or 403(b)
  • Pension
  • IRA 
  • Roth accounts

If your employer offers a retirement plan at work and matches some of your contributions, that’s often a great place to start. Your 401(k) or 403(b) will probably have a lot of different investment options to choose from, but we can help you find the ones that match your goals and risk tolerance. Our retirement planners can also help you manage your investment accounts for you.

Few employers offer pensions or defined benefit plans. Both are fixed-income retirement plans and highly desirable. To augment your retirement savings, you can set up an IRA, individual retirement account. With an IRA, you have more investment options than with a traditional 401(k). We can help you navigate those options and make sure your portfolio matches your investment objectives.

Finally, there are Roth accounts. Unlike the other retirement accounts, your contributions to the Roth account are after-tax contributions. Your withdrawals during retirement will be tax free. Our retirement planners can help you calculate which type of account would be best for your tax situation. You may even use both to save on taxes now and receive tax-free income later.

<span style="font-weight: 400;" data-mce-style="font-weight: 400;">How to Support Your Lifestyle in Retirement</span>

How to Support Your Lifestyle in Retirement

The goal for your retirement plan is to support your lifestyle in retirement. Most people will receive income from different sources during retirement, including Social Security benefits, distributions from an employer-sponsored plan, and withdrawals from an IRA or Roth account. You can also augment your retirement income with your personal investment and savings accounts.

You must calculate your expected living expenses to determine how much income you need during retirement. To do that, you’ll want to picture what your retirement will look like. Will you travel? Will you live in a home that’s paid off? How much do you expect to spend on dining out and activities? Don’t forget to budget for medical expenses. If you need help, call us, and we’ll work on your retirement plan together.

FAQs about Retirement Planning

Why Is Retirement Planning Important?

You probably can’t rely on Social Security benefits to cover your living expenses, even if you wait to withdraw until you’re age 70. Most people need alternative income sources, either from a job, a family member, or retirement savings. By planning for retirement now, you can make sure you have the income to support your lifestyle when you can no longer work full-time. 

Am I Too Old to Start Planning for Retirement?

No. While it might have been better to start planning sooner, it’s not too late to do it now. Our retirement planners can advise you on how to best prepare for retirement after analyzing your current financial situation. We can even help you plan your retirement distributions once you retire, providing you with a regular income while letting the rest of your assets grow.

What Does Retirement Planning Involve?

Retirement planning involves different areas of finance. You want to include taxes in your retirement plan, because you’ll either have to pay them now or later. Your retirement plan also helps you think about the lifestyle you want to enjoy during retirement and plan your investments accordingly. When you work with a professional, you can rest easy knowing they’ve thought of all the possibilities for you.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

Investing in mutual funds involves risk, including possible loss of principal. Fund value will fluctuate with market conditions and it may not achieve its investment objective.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Stock investing includes risks, including fluctuating prices and loss of principal.

Let’s Work on Your Retirement Plan

Planning your retirement is a complex process involving multiple facets of financial planning. You don’t need to do this on your own. We will help you create a retirement plan, manage your wealth, and strategize your taxes, and set you on the path to a prosperous future. Call us today to schedule your appointment. | 515-644-7541