1. What do you want to do with your time in retirement? You will not have to punch the clock anymore, which is delightful. But what will you do with all those new found hours?
2. Do you know what you don't know? There are multiple ways to save for retirement: 401k, Traditional IRA, Roth IRA, SEP, 403b. Each one of those plan has parameters for amount to invest, tax treatment, asset protection, withdrawal rates etc. And that is just the beginning of Retirement planning. You are busy with your profession, your family, just getting through the day. What you don't know may hurt you though in the form of penalties or lost earnings.
3. How much do you need to save for retirement? This question is involved. You will need to consider how much you will receive in Social Security, what your expenses will be. What other sources of income will you have to access? While you can estimate some good answers for these questions, there are some things you just won't know. For example, how long will you live? Many retirees will live 30 years in retirement. How healthy will you be? You will want to explore options for health care in retirement so you may make informed decisions. What if you are forced into early retirement? Planning includes more than just calculating savings and withdrawal rates. Effective planning takes into consideration, how to weather the unknowns as well as the knowns.
4. Do you want to leave a legacy when you die? This may include providing an inheritance for heirs or support for your favorite charity.
There are some legal and tax issues you will want to consider with almost every decision you make for retirement. Planning takes these issues into account to help you maximize your chances of success.
Your retirement will be what you make of it and there are many possibilities. Many people begin new careers, develop talents that did not realize they had. Others relax and decompress. Some people down size and some move across the country or to another country. A good place for retirement planning is to dream how you would like it to be. Capture those dreams and then plan to make them happen. If you want help with developing your financial plan, give us a call.