How to Create a Retirement Income Plan
Jeff Martin is a financial advisor at Cornerstone based in Reno, NV. Jeff has earned the Life and Health Insurance Licensure and has passed the Series 65 examination. He enjoys being able to help clients create customized strategies for their portfolios based on their unique financial goals.
HOW TO CREATE A RETIREMENT INCOME PLAN
Retirement should be a time of relaxation and enjoyment. However, without a solid retirement income plan, those golden years can be filled with financial stress. Creating a retirement income plan can help you avoid that stress and will let you live with the financial ease you deserve when you have an understanding of your income and expenses.
STEP 1: UNDERSTAND YOUR EXPENSES
The first step in creating your retirement income plan is calculating how much you'll need to spend. This could range from your day-to-day living expenses, to healthcare, leisure, travel, and even supporting loved ones. Keep in mind that some costs, like healthcare, might increase over time.
STEP 2: DETERMINE YOUR INCOME SOURCES
Now let's identify all potential income sources. These include social security payments, pensions, part-time work, annuities, or income from any rental property. And no, we haven’t forgotten your key source - your savings. The goal here is to ensure that your income meets or surpasses your expenses.
STEP 3: EVALUATE YOUR SAVINGS & INVESTMENTS
Look at your IRA, 401k, stocks, bonds, savings accounts, and mutual funds to understand how much you've set aside for your retirement. Also, check how these are invested. A widely accepted strategy is to shift towards more conservative investments as you approach retirement.
STEP 4: DEVELOP A WITHDRAWAL STRATEGY
It's crucial you strategize on how you'll withdraw funds from your accounts. Withdraw too much, too soon, and you may run out of funds. On the other hand, withdrawing too little might mean living a less-than-comfortable lifestyle, or leaving items on your bucket list unchecked. Your withdrawal strategy should aim for a balance - ensuring your money lasts while also providing a comfortable lifestyle. Beyond the goal of avoiding a premature spend down, taxes play a large role here as well. How, when, and where you take withdrawals will either expand or contract your tax footprint.
STEP 5: PLAN FOR THE UNEXPECTED
Life can be unpredictable, and it's always wise to earmark some funds for emergencies. This could be for a health issue, home repairs, or for helping a loved one in need.
STEP 6: REGULAR REVIEWS
Last, but definitely not least, consistently review and adjust your plan. Changes in the market, personal health, or family situations all require your plan to be flexible. Remember, the aim is to navigate retirement comfortably and securely.
WHERE TO GO FROM HERE
Remember, everyone's retirement needs are unique. This is your time, you've been working towards it all your life. Here at Cornerstone, our financial advisors can tailor a retirement plan to meet your specific needs.
Take a deep breath and pat yourself on the back. You're on your way to creating a dynamic income plan to enjoy your retirement days. Cheers to the golden years - they're going to be fantastic!
To see how our advisors can help you with assessing your portfolio, call our office at 775.853.9033 or click here.
Based in Reno, NV, Cornerstone is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.
This information does not constitute legal or tax advice. PCIA and its associates do not provide legal or tax advice. Individuals should consult with an attorney or professional specializing in the fields of legal, tax, or accounting regarding the applicability of this information for their situations.