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Retirement Planning


Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve those goals. Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to determine if the retirement income goal will be achieved.

Retirement is one of the most important life events you’ll experience, and getting it right takes planning. Making sure you have a comfortable retirement from a personal and financial perspective is a long process that takes years of following a plan and continuous saving. Once you’ve reached your financial goals, managing your retirement is a continuing process that lasts the rest of your life.


The 3 Stages of Retirement Planning:


1.  Saving for Retirement

It’s never too early, or too late, to start saving.  Know how much to save and invest based on how close or far you might be from retiring, and create a plan, while saving for other goals too.


2.  Preparing to Retire

Map out your sources of income and start to plan for how you’ll cover your living expenses.  Decide when to claim Social Security and understand health care costs.


3.  Living in Retirement

Use smart investing and withdrawal strategies to help make sure your money lasts throughout retirement. Learn about different ways to generate income during retirement.



Saving for retirement is a marathon, not a sprint, and it’s not always easy to know if you’re on the right track.  See when you can realistically retire  It’s not a simple question to answer, but running some numbers will give you a good idea about where you stand. 


Things to Consider:



Know how much you may need and how much you may have. Your retirement income should come from a variety of sources.



Understand how to estimate your expenses in retirement and create a plan to pay for them.  You may decide to retire before all your debt—for example, your mortgage—is paid off, and that’s okay.  Just make sure you understand the implications and have a plan to pay it off.


Your Home

For most Americans, their home is the single biggest asset they own. How does that fit into your retirement plan? In the past, a home was considered an asset – but since the housing-market crash, planners see it as less of an asset than they once did.



Find out whether the investment approach you’ve been using while you’ve been saving is the one you’ll need in the future.


Tax Efficiency

Once you reach retirement age and begin taking distributions, taxes become a big problem. Most of your retirement accounts are taxed as ordinary income tax. That means you could pay as much as 37% in taxes on any money you take from your traditional 401(k) or IRA.  That’s why it’s important to consider other vehicles that put in after tax dollars which allow you to pay taxes upfront rather than upon withdrawal.


Social Security

Learn how Social Security timing will affect your income.  You can start collecting Social Security payments at age 62, but that’s not the whole story.  Learn about ways to maximize your benefits and what the best time may be for you to claim Social Security.


Health care

Learn how medical care could affect your expenses.  Many of your day-to-day expenses in retirement will be similar to those you have currently. But one expense you’ll have to think about is your medical insurance.  Review your options for insurance coverage, learn about Medicare, and find out more about the costs you may need to budget for in your retirement planning.


Other Insurance Needs

There’s also life insurance, long-term-care insurance and annuities to consider and evaluate in the planning process.  An annuity is much like a pension. You put money on deposit with an insurance company that later pays you a set monthly amount. There are many different options with annuities and many considerations when deciding if an annuity is right for you.



One of the most important parts for retirement planning is to actually keep your plan on track. 

As you get closer to retiring, make sure you’re doing everything you can to set your savings up for success.  Research shows that those who have retirement plans in place have a happier, less stressful, and more financially secure retirement.  

You don’t have to buy into all the doom-and-gloom retirement predictions. Decide to be more proactive, take the first few planning steps, and begin to take charge of your financial future.


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