Retirement Planning essentials

"The question isn't at what age I want to retire, it's at what income?"

- George Foreman


Retirement planning is ideally a lifelong process. You can start at any time, but it works best if you begin sooner than later. That’s the best way to insure a safe, secure, and enjoyable retirement. Retirement planning includes identifying sources of income, evaluating expenses, implementing a savings program, and managing both assets and risk. Future cash flows are estimated to gauge whether the retirement income goal will be achieved.

Retirement Planning Strategies should include the following: 

  • Social Security Maximization and Medicare planning
  • Required Minimum Distribution strategies for “Qualified” assets (401k’, 403b’s, SEP’s, etc.)
  • Pension Maximization: maximize annuity distribution & offset spousal considerations
  • Estate Planning
  • Legacy Planning

Three Keys to Funding a Comfortable Retirement 

  • Determine Your Needs
  • Develop an Investment  Strategy
  • Protect Your Nest Egg

 Factors That Influence Your Retirement Income Needs 

  • Retirement  age
  • Length  of retirement
  • Health-care  needs
  • Inflation
  • Lifestyle

 Length of Retirement*

  • At age 65, a healthy individual may expect to spend 20 years or longer in retirement.
  • Males Chance of living to Age 85 = 63%, Age 90 = 43%
  • Females chances of living to Age 85 = 72%. Age 90 = 53%
  • You may need anywhere from 70% to 100% of your pre-retirement  income to live comfortably in retirement.

      *Source:  Society of Actuaries, 2020

Taxable investment vs Tax-Deferred Investment:

An initial $10,000 investment with a 6% annual rate of return applying a 24% tax rate over 30 year will grow 

  • Tax deferred = $57,435
  • Taxed annually = $38,104

 Why Your Time Horizon and Risk Tolerance Matter 

  • Stocks = 10.22% average annual return (expect long-term significant growth, but also significant short-term losses)
  • Corporate bonds = 6.58% average annual return (less chance of loss, but with less growth than stocks over time
  • T-Bills = 2.24% average annual return (low returns, little to no risk)

     *reflects the past 25 years

Start Saving Now

$3,000 annual investment with a 6% annual rate of return and Reinvestment of earnings

  • Beginning at age 20 = $679,500
  • Beginning at age 35 = $254,400
  • Beginning at age 45 = $120,000

        (Taxes not considered)