01Developing strategies exclusively to your goals
02Review of your current savings and investment strategy
03«WHAT IF?» Scenario Planning
04Minimizing the tax impact of 401(k) and IRA distributions
05Projecting cash flows and discovering income streams in retirement
06Optimizing payout options for a pension or other deferred compensation
07Forming tax-efficient withdrawal and social security strategies
08Exploring retirement savings options after maxing out your 401(k) or 403(b)
09Analyzing Roth IRA conversions
10Planning for Bequests
11Diversifying your savings for tax advantages
12Managing your investments during retirement
13Planning for medical expenses
14Accounting for Medicare and Long-Term Care Insurance
What is retirement planning?
As one of the key components of the financial planning process, retirement planning focuses on how your assets can generate income to cover expenses you incur after your paychecks stop.
How much money do you need to retire?
There is no universal number. You’ll hear that you should aim to have a nest egg of $1 million to $1.5 million, or that your savings should amount to 10 to 12 times your current income. However, that’s a one-size-fits-all answer that doesn’t reflect at all on your current or planned lifestyle. The best way to gauge how much you’ll need is to develop a retirement projection with the help of a financial advisor. Your retirement projection will help to guide how much you set aside today, and where you invest to continue to generate income after retirement. However, if you want to start with a quick rule of thumb, many find they need to replace 60-80% of their pre-retirement salary.
Why is it important to use a financial advisor to plan for retirement?
Simply put, expertise and objectivity. Success requires not only experience with and an understanding of trends, markets, and investments, but an unbiased view of your current situation and your future goals. A financial advisor gets an accurate picture of your income and expenses, assets and liabilities, and then uses this information to help you determine your retirement budget based on your personal plan.
What is an IRA (individual retirement account)?
An individual retirement account (IRA) is a personal, tax-advantaged account that individuals use to save and invest for retirement. IRAs can be made up of many various financial products, including stocks, bonds, and mutual funds. Two commonly used IRA’s are the Traditional IRA and the Roth IRA. A Traditional IRA allows you to direct pre-tax income to investments that can grow tax-deferred until withdrawal during retirement. Once you retire, the withdrawals are taxed at the IRA owner’s current tax rate.
In contrast, the Roth IRA contributions are made with after-tax dollars, so when you retire, you can withdraw from the account without paying any income taxes on the withdrawals. Both types of IRAs have contribution limits and withdrawal rules that apply. A financial advisor can analyze your situation and determine which type of IRA may be the best fit for you.
How much will I receive from Social Security when I retire?
Your social security retirement benefit will be based on your average lifetime earnings (using your highest 35 years of earnings). The amount you receive will be affected by when you start to collect your benefits, whether you work after you retire, and other factors. To estimate your retirement benefit based on your actual earnings record, visit the Social Security website to use the Retirement Estimator. This tool will illustrate how different earnings amounts and retirement ages will affect your social security benefit.