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Retirement Planning Blog

Answers to Frequently Asked Questions Regarding Financial Planning

Plan Your Retirement Before You Retire

Posted by Mark Snyder | May 10, 2017 12:00:00 PM

Today, retirement is sometimes called your “second act,” and preparing for a successful second act requires planning. It is generally advisable to begin your retirement planning early – typically the earlier the better – and while many people avoid retirement planning because they view it as a complicated group of challenges, it is generally nothing that cannot be overcome with proper planning.

Life Spans

It is a fact that, as a society, we are generally living longer, which means that your savings will probably also need to last longer. With that in mind, the current economic landscape is characterized by uncertainty, volatile markets, and historically low interest rates, all of which have altered our retirement landscape. People tend to approach retirement with the mindset that it is best addressed through a combination of retirement accounts – such as a 401(k), an IRA, or Social Security – as they aim to attain a reliable income stream once the regular paycheck ends. In a world of low returns and high volatility, however, these traditional assumptions may fall short for many.


Where to Put Your Money?

Deciding where to put your money when you plan your retirement is never an easy question to answer, no matter the tax environment. While there has been talk about changing the tax structure, it is relatively safe to say that annuities, municipal bonds and municipal bond funds will retain their tax-advantaged features. If you have the available cash, then it is usually smart to invest as much as you can in tax-advantaged investments. Overlooking the tax impact on investment returns is a costly and common mistake to an investor. According to Morningstar, those who did not manage their investments with taxes in mind gave up between one and two percent of returns to taxes.

As important as tax minimization is, it is only one component of a long-term financial plan and should not be used as the sole reason for making any investment decisions. When you schedule a financial check-up with us, we will review your entire personal financial profile by focusing on your retirement planning, insurance needs, estate planning, and any other concerns in addition to tax minimization.


Things to Consider

It is important to build comprehensive retirement plan, identifying the risks and offering ways to manage against them. Some of these risks include:

  • Longevity risk: your retirement may last longer than planned
  • Market risks: the threat of significant investment losses
  • Taxes and inflation
  • Health and long-term care expenses, including Medicare uncertainty and rising drug costs
    Disability: hurting your ability to earn an income.

What about Insurance?

Many people are surprised to learn how life insurance can be an important part of a retirement plan. While death benefits are generally well known, the living benefits are often overlooked. A permanent life insurance policy can provide a low-risk way to help you comfortably retire and provide a permanent income stream.


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Topics: Retirement Planning

Written by Mark Snyder