Retirement planning is figuring out how to finance your life after you no longer receive a paycheck from your employer. It’s a tall order, but it’s something everyone needs to concern themselves with. You’ll probably receive multiple streams of income during retirement, from various retirement accounts, pensions, Social Security, investments, and personal savings. With the help of a financial advisor, you can set yourself on track towards a retirement that will be financially stable and comfortable.
You probably already know you should have a retirement plan in place. While you can receive Social Security benefits as young as age 62, those are likely not enough to pay your bills. Most people need more, especially if they have to pay for extensive medical care. Ideally, when you plan for retirement, you don’t just think about the bare necessities. Now might be the time to travel the world or buy a sailboat. With proper planning, you can pursue the retirement of your dreams.
Remember that retirement planning includes planning for your long-term care needs and it should also focus on protecting your current and future wealth. Once you reach retirement age, the plan will shift to focus on the distribution of assets. Our financial advisors are with you every step of the way.
Do you know what’s not a good retirement plan? Playing the lottery or buying stocks from only a few companies and hoping they go up in value. Experts agree you must protect your wealth by diversifying your portfolio holdings and keeping track of its performance. That’s what a financial planner is for.
When you invest in a retirement plan, you can take advantage of tax breaks offered by the IRS. You’re allowed to make contributions to your retirement fund with pre-tax income. This allows you to grow your nest egg in a tax-sheltered account. But, you will have to pay taxes when you take money out.
If you’ve already maxed out all your retirement accounts at work, you can set up individual retirement accounts. These have their own contribution limits. After that, you can set up investment accounts to take advantage of compound interest and the performance of the stock market. I can break it down for you and talk about which type of retirement and investment accounts make the most sense for your situation.
You don’t need to be an expert on retirement plans, but we recommend you work with one. We can answer any questions you may have about the process. Meanwhile, here are some answers to some of the common inquiries around retirement plans.
Most people put off starting a retirement plan because it can feel intimidating. There are a lot of options to choose from, even if it’s an employer-sponsored plan like a (401)k. The easiest way to start is to talk to a financial advisor about your needs and goals. Together, we can create a solution that’s right for you. We’ll do all the hard work in setting things up and keeping you on track with your contributions, too.
The most important part is to get started as soon as you can. This is followed closely by making regular contributions, as much as you can reasonably commit to every month. It’s better to start with smaller amounts than to make an enormous commitment and have to stop contributing to your retirement plan altogether. Consistency will pay off.
This question requires an individual approach. There’s no one-size-fits-all portfolio strategy for your retirement account. If you’re risk averse and plan to retire soon, you may invest heavily in bonds. Someone who has decades before reaching retirement age is likely to have mostly stocks in their portfolio. Together, we’ll decide what’s right for you based on your investment objectives and timelines.
Don’t let saving for retirement intimidate or scare you. You can take it one step at a time by making a retirement plan today. Give me a call and we’ll talk about your financial situations and your goals. I’m here to help you simplify the process that comes when you have a plan in place for your financial future.