Retirement Planning: The Core of Your Financial Plan
Produce_11Will I have enough money to retire?” tops the list of concerns that our clients express when they first come to see us. And why not? Successfully funding retirement is a huge financial challenge. There are no do-overs if you don’t get it right the first time. So careful financial planning is essential.
People are living longer than ever before. Healthcare costs are soaring. Pensions and government benefits are under attack. Financial planning for retirement is no longer a luxury. It is essential to your own financial security and independence. A comprehensive financial plan puts you in control of your own financial destiny. Make time your friend, not your enemy by letting us help you start planning today for financial security in the future.
Here is how the retirement planning process works:
Determine the Need:
We consider you current budget and lifestyle, and anticipate changes based on your vision of what retirement will be like. Many factors may influence your retirement cash flow needs. Many people move to a a smaller home, or to another state. Some plan to travel, others hope to pursue favorite hobbies. And of course, there are taxes and medical costs we just can’t avoid. Coming up with a realistic projection of how much money you will need to live on in retirement is an essential first step in creating a well designed financial plan.
Determine expected income sources:
Next we need to figure out where the money is coming from. For most people there are four potential sources of income in retirement. Social Security. Employer pensions. Savings and investments. Part time work. Your financial plan will illustrate how these income sources will work together to provide the funds your need to meet the need determined above.
Savings and Investments:
Whatever you will spend in excess of your SSI, pension, and work income must generally come from your savings and investments. For younger clients, we focus on savings rates and investment strategies to help grow the nest egg. The big question for younger clients is “will there be enough?”. For older clients who are near to or already in retirement, we focus on income, withdrawal, budget, and tax strategies to make the most of the assets you have saved. Above all – we want to make sure you do not run out of money!
Don’t forget inflation and taxes:
A growing challenge in recent years is that prices for the things retirees spend most of their money on have been increasing faster than everything else. Medical costs, for instance, as well as taxes, energy, and groceries. We make sure that your retirement plan adequately prepares you for the creeping scourge of inflation. We will also determine the most tax smart way of using your retirement assets. Remember that many of those tax deferred contributions you made to IRA’s and 401k plans during your working years will be taxable withdrawals once you start taking the money out.
Retirement Income in a 0% World:
Retirement plans made even 3 or 4 years ago are being devastated by the low interest rate policies being pursued by the U.S. Federal Reserve. This adds insult to injury after many retirees saw their nest eggs scrambled by the financial crisis of 2008. In the past could retirees could generate sufficient interest income to fund their needs simply by investing in federally insured bank CD’s with 4-5% interest rates. Those days are gone. Not knowing what else to do, many retirees just accept the tiny returns being offered by banks. But it still is possible to enjoy retirement income without taking on unacceptable levels of risk. It’s not as easy as it used to be, but it is possible! As your trusted financial adviser, we can help recommend investment strategies to meet your retirement income needs – while still making sure you can sleep at night!.