Having the choice to retire requires financial freedom. Proactive retirement income planning can help you pursue this freedom.
Here are 3 simple steps to help you start planning right away:
- Define your Retirement Goals
- Develop a Plan to Generate Income
- Review your plan annually
Define your Retirement Goals
Whether you’re looking to better your health or your financial security, establishing goals is a great place to start.
When would you like to have the choice to stop working? How much income is required for the lifestyle you desire in retirement? What steps are you willing and able to take to pursue your goals? These are just some of the questions that can help establish your retirement income objectives.
Develop a Plan to Generate Income
After you establish your retirement goals, it is helpful to develop and implement a strategy to address your retirement income needs.
Employer pensions are becoming more and more uncommon. This means that planning for retirement income will likely fall on your shoulders. I know a lot of hard-working people who are making 401k contributions and paying down debt, but what does it all add up to? This is a question that tends to be addressed far too late in the game for many.
My father always said, “nothing is more conducive to arriving nowhere than to be going nowhere.”
Your retirement income strategy should include the following:
- Choosing investments that realistically fit your risk tolerance/objectives
- Utilizing investment vehicles that can help you work towards your goals effectively
- Accounting for inflation before and after you start taking withdrawals
- Evaluating tax implications before and after you start taking withdrawals
- Considering the sustainability of your retirement income plan
One of the most common fears about taking the retirement plunge is outliving your money. As mentioned above, your retirement income plan should include a sustainable withdrawal rate from your investments. For example, a million dollars is a lot of money, but not if you need to generate $100,000 per year to maintain your present quality of life. The goal is to avoid depleting your money during your lifetime.
Annual Review: A Retirement Physical Exam
Life events can change your retirement goals quickly and abruptly. This is why I meet with my clients to conduct annual financial checkups. I have found that a little preventative maintenance can go a long way…just like a yearly visit to the doctor.
This meeting offers a thorough check-up of your entire financial picture, including tax planning, estate planning, retirement, investment services, and insurance. It is an opportunity to uncover any major changes in your life and/or goals. It is also a chance to review the details of your financial plan. For example, are your beneficiary designations still correct? Are your accounts still titled correctly?
When it comes to retirement income planning, simply knowing where to start is often the hardest part. One of the biggest questions is whether or not you feel confident in your ability to tackle this matter alone.
How Can Wealthnest Help You?
As a CERTIFIED FINANCIAL PLANNER™, I play a central role in helping my clients pursue the luxury of retirement by organizing financial goals, implementing a plan of action and closely monitoring that plan regularly over a period of time.
If you have any questions on retirement income planning, then please contact my office.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing in securities is subject to risk including risk of loss of principal. No strategy assures success or guarantees against loss.