Retirement can be a smooth transition or a jarring change. While money management is a necessity, planning for lifestyle changes and psychological adjustments is also very important. Today’s retirees can expect to live longer, healthier, and more active retirements than any other generation in history. But along with these advantages comes responsibility. You will need to take care of the money you’ve accumulated and pay for that longer, healthier lifestyle while making your savings last much longer than your parents needed to.
Our job in this retirement planning arena is to help you match your needs and goals with the most suitable financial products and investments available. Given today’s dramatically longer life expectancies, combined with declining Social Security payouts and escalating health care costs, your planning is more complex than generations before you. Thus, as a beginning point to retirement planning, we help you make a realistic appraisal of your financial situation. Then, we will help you find a balance between your immediate financial needs and your long-term plans, to help ensure that you don’t run out of money during retirement and can enjoy the lifestyle you desire.
Planning for retirement can be like a lightly, foggy morning. The further you are from retirement, the harder it is to see. It is possible, however, to develop a viable plan based on reasonable projections of what you will need at retirement and the resources you can expect to have at that time. Once you’ve determined your retirement income needs, you must come up with ways to meet those needs. Obviously, the earlier you start planning and saving for your retirement, the easier it will be. However, it is never too late to start saving. One way to boost returns on retirement savings is to take full advantage of opportunities to defer federal income tax on your retirement investments. On any investment, your real return is the return you earn after taxes are paid and inflation is accounted for. While you can’t stop inflation, you can use various planning strategies to stop annual income taxes on your retirement savings and investments until you retire and begin using your money. One of the easiest ways to defer taxes on your retirement savings is to invest through a tax-advantaged or “qualified” retirement plan, such as an employer-sponsored 401(k) or 403(b) plan, or some form of an individual retirement account (IRA). Annuities and life insurance programs can also act as tax-efficient, retirement plan supplements due to their tax-preferred features and benefits.
Just as important, are decisions involving retirement plan distributions. When you’re ready to retire, or if you leave your present job to take another, you’ll need to decide how to handle the retirement savings you’ve built over the years. Making the proper distribution decisions can be extremely complex. Laws require certain minimum distributions on some retirement plan assets, while others can be continually deferred. We help you determine which assets to draw from to comply with these complex laws as well as to maximize your retirement dollars in the most tax-efficient manner. The age at which you choose to begin taking your Social Security check makes a big difference in the annual amount you receive. Deciding when to take your Social Security benefits is a big, and sometimes complicated, decision. We help you make an informed decision by reviewing with you several questions and scenarios. You can find out for yourself what your estimated monthly Social Security benefit would be by calling the Social Security Administration toll-free at 1.800.772.1213 to request a “Personal Earnings and Benefit Statement” based on your actual earnings history.
Once you have an estimate of your anticipated Social Security benefit, you will most likely realize, as most American’s do, that your Social Security benefit will not come close to supporting the retirement you’d like to achieve. In fact, the current average monthly Social Security benefit places a retiree just above the federal “poverty level.” At best, Social Security should be depended on strictly to provide a basic safety net. In fact, many of our younger clients prefer not to include future Social Security benefits into their retirement projections at all.Remember, you could spend a third of your life in retirement, so proper planning could make the difference between enjoying the golden years, we all dream of, or constantly struggling to get by.