Retirement Planning

It’s important to prioritize retirement planning because you don’t have unlimited time and resources to ensure a comfortable lifestyle when you stop working. Retirement planning happens in phases. Whether you’re just starting out in your career, are trying to catch up with your contributions, or are getting ready to retire soon, our financial advisors are here to help you make the best decisions for your future.

Retirement planning doesn’t end when you set up your retirement account through your employer or open an IRA. For example, 401(k) planning can involve reevaluating your portfolio and making buying and selling decisions regarding your assets while considering the tax implications and your objectives. You don’t have to make these complex investment decisions alone, because our financial advisors are here to help.

The Phases of Retirement Planning

The first phase of retirement planning is getting started. We can help you set up your retirement account, whether that’s a 401(k), 403(b), or IRA, or a combination of those. Young families or individuals starting out in their career can benefit from making significant contributions as early as possible. The more time you have until retirement, the more you’ll benefit from compound interest.

The longest phase of retirement planning is the accumulation phase. These are the decades you spend working and contributing to your retirement account with every paycheck. How much you need to contribute depends on your goals and your timeline. We can help you select the assets for your portfolio that match your objectives and risk tolerance.

Finally, there’s the distribution phase. Having an income distribution plan is the best way to ensure that you can support your lifestyle without outliving your wealth. Our financial advisors can help you create a lifetime income plan that provides a fixed income and allows you to enjoy your retirement.

How Retirement Plans Work

Retirement plans offer tax benefits to anyone with earned income who is prepared to invest in their future. An employer-sponsored plan, such as a 401(k) is an example of a tax-deferred retirement plan. You can contribute to your retirement account with pre-tax income and your investments will grow inside your retirement account on a tax-deferred basis. You’ll only pay taxes once you receive income in retirement.

There are also Roth retirement accounts that offer tax benefits in reverse. With a Roth account, you contribute after-tax dollars, allow the investments to accumulate, and withdraw tax-free income in retirement. There are pros and cons to both approaches. Most people expect to be in a lower tax bracket in retirement, which is why a tax-deferred account makes sense. But having tax-free income from a Roth account can be a great way to supplement your retirement income.

Frequently Asked Questions

How soon you can retire depends on how much income you need in retirement and which income sources you have available to you. You may have a 401(k), an IRA, Roth accounts, private investment accounts, and income from Social Security benefits. We can help you create a retirement distribution plan to ensure you can enjoy your retirement without outliving your wealth.

Most people will need 60 to 80% of their pre-retirement income during retirement. This number may be different for high-wage earners. You also have to think about healthcare costs. We can help you figure out how much money you need during retirement and the steps you need to take to generate that kind of income.

Most retirees receive income from different sources. This includes Social Security benefits, 401(k) withdrawals, IRA distributions, and income from other investment accounts. To provide a reliable monthly income, you might purchase a fixed or indexed annuity with the funds in your portfolio. This gives you income security and peace of mind.

The longer you wait to receive Social Security benefits, the more you will get each month. You can apply for Social Security benefits as early as age 62, but you can receive the maximum payout if you wait until age 70.

Talk to Us about Your Retirement Plans

Retirement planning is an important part of preparing for your financial future. No matter where you’re at in your journey, it’s not too late to get started. Contact our financial advisors to schedule an appointment and discuss your retirement plans today.

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