Retire – Retirement Planning Strategies

Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations. For one, people are living longer – much longer. A person who turns 65 today could be expected to live as many as 20 years in retirement as compared to a retiree in 1950 who lived, on average, an additional 15 years. Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.

Paying for Retirement

Retirees who have prepared for their retirement usually rely upon three main sources of income: Social Security, individual or employer-sponsored qualified retirement plans, and their own savings or investments. A sound retirement plan will emphasize qualified plans and personal savings as the primary sources and ideally, Social Security as a safety net for steady income.

Social Security

Social Security was established in the 1930’s as a safety net for people who, after paying into the system from their earnings, could rely upon a steady stream of income for the rest of their lives. The age of retirement, when the income benefit starts was, originally, age 65 which was referred to as the “normal retirement age”. Now, for a person born after 1937, the normal retirement age is being increased gradually until it reaches age 67 for all people born in 1960 and beyond. The amount paid in benefits is based upon the earnings of an individual while working. If a person wanted to continue to work and delay receiving benefits, they can do so and build up a larger benefit. Conversely, early retirement benefits are available, at a reduced level, as early as age 62.

There are many considerations to contemplate in social security planning. There are strategies available that may allow you to maximize your benefits. Please reach out and let’s talk about your particular situation and how best to approach this area.

Lifetime Income Need

Your life after retirement can last from 20 to 50 years or more depending on your current age. The need to be able to provide for a steady stream of income that cannot be outlived is more important than ever. With the prospect of paying for retirement needs for years to come and also having a desire to have the fullest of engaging futures, retirees need to be concerned with maintaining their cost-of-living.

There are many ways to approach this income need and many resources to consider. Maybe you have pensions, maybe not. Maybe you have rental income, maybe part time work, maybe windfall profits from selling your business. Each client is unique but the goal is universal. How do we provide you with the income you require that you can’t outlive? Ask me.

Health Care Needs

Longer life spans can also translate into more health issues that arise in the process of aging. The federal government provides a safety net in the form of Medicare, however, it may not provide the coverage needed especially in chronic illness cases. Planning for long-term care, in the event of a serious disability or chronic illness, is becoming a key element of retirement plans today.

Estate Protection

Planning for the transfer of assets at death is a critical element of retirement planning especially if there are survivors who are dependent upon the assets for their financial security. Planning for estate transfer can be as simple as drafting a will, which is essential to ensure that assets are transferred according to the wishes of the decedent. Larger estates may be confronted with settlement costs and sizable death taxes which could force liquidation if the proper planning is not done.

This is another very important conversation we’ll have when the time is right.