Retirement Planning
Destination: Retirement
Retirement is typically one of the top financial goals you'll work toward. It may be the furthest out, but any good financial plan starts with figuring out how much you'll need to live on during your retirement years, putting a strategy in place to get there, and then addressing your shorter term needs.
Ongoing advances in medical care have resulted in an unprecedented increase in life expectancy over the last few decades. The average American today is living a longer life than his or her counterpart of a generation ago. This means that the average person leaving the world of full-time work at age 65 can reasonably expect to spend 20 to 30 years or more in retirement. Having the freedom to live life your way during retirement will depend, at least in part, on having a plan that aligns with your personal goals.
Envision the retirement you want
Another factor in figuring out how much income you will need in retirement is picturing how you want to spend your retirement years. Do you want to travel? Own a second home? Leave a legacy to your family, charity, or alma mater? Or, maybe you just want to live a simple lifestyle with the primary goal being to cover your basic expenses. Now's your time to think through the world of possibilities, because the sooner you start planning — and saving — the better able you are to reach your goal.
Time is your friend
Setting aside even a small amount each month can add up over time. One common and effective strategy is to use traditional retirement vehicles, such as an employer- sponsored 401(k) plan or individual retirement account (IRA), and set up automatic contributions. While each of these types of retirement accounts has unique rules, all offer tax benefits that can add up over the long term. Even if you're nearing retirement, it's not too late. If you are 50 or older, “catch-up contributions” help pre-retirees stash even more into their 401(k) or IRA than the basic contribution limits each year.
How should you allocate your money?
How you allocate the money you've accumulated — and the goal-related products you choose — are probably the most critical factors when it comes to creating a retirement plan. As mentioned, there are IRAs for retirement goals, as well as guaranteed lifetime income products, but depending on your life stage you may want to consider other solutions as well. For example, cash value life insurance could help protect your family's financial security and serve as an effective estate planning tool.
Diversification helps balance risk
Diversification can be summed up in the phrase, Don't put all your eggs in one basket. Regardless of the types of retirement product solutions you invest in, don't bet your retirement nest egg on just one. The types of products you select should vary depending on factors like your risk tolerance and retirement time horizon. These two factors work hand in hand. The further out your retirement, the more risk you may be comfortable in taking with your investments.
When it's time to determine the financial strategy that's best for you, feel free to reach out to one of our Wealth Management Advisors in the Savannah GA to help you map out a sound plan. In the meantime, make sure you have a clear vision for your goals so you'll be better prepared to plan your financial future.
Older Millennials face New Retirement Planning Challenges
The words “retirement planning” and “millennial” are not often seen in the same sentence, but the first birth year in the millennial generation was 1981. Men and women born at the beginning of that era are now hitting their mid to late thirties. Career paths have been established, marriages and children have entered the picture, mortgages and car payments have replaced student loan debt. The “golden years,” once a distant illusion, are creeping closer.
Many financial planners will tell you that the most comfortable retirement situations belong to those who started planning prior to their fortieth birthday. Far too many Americans look at their 401k or pension plan and feel that its sufficient to meet their needs when they sail off into the sunset at age 65. Thirty years of investing in equity-based retirement plans worked for the last generation, but this may not be sufficient for millennials.
What would you do for income if had to suddently stop working? We can help!
Begin Retirement Planning Today
There's a lot to digest here, but all you should consider is making a phone call. Investing for those final years may not be something you want to do alone. Savannah Wealth Group is a retirement planner that Savannah, GA residents can count on. We can guide you in your retirement planning and make sure you enjoy life to its fullest, both today and in the future. Start today and that can happen. Contact us to learn how.
Call (912) 999-1805
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