Are you in the homestretch of your career? Can you see retirement on the horizon? If so, you may already be dreaming about vacations, golf outings and time spent relaxing at home.
It’s hard not to look ahead when retirement is so close. However, you also may want to use this period to nail down the final steps of your retirement planning. The last few years of your career may be your last opportunity to boost your savings, minimize your costs or help protect yourself against risk.
Below are a few steps to consider before you head into retirement. If you haven’t yet taken these steps or even developed a retirement strategy, now may be the time to do so. A financial professional can help you implement these steps and others so you can enjoy a long, financially secure retirement.
Consider qualified account catch-up contributions.
If you’re like many Americans, you’ve used a 401(k) or an IRA to save a portion of your retirement assets. These accounts can be popular because they offer tax-deferred growth. That means you don’t pay taxes on growth that occurs inside the account as long as the funds stay inside the plan.
In 2018 you can contribute as much as $18,500 to a 401(k) plan. If you are 50 or older, however, you can contribute an additional $6,000 in catch-up contributions, giving you a total allowable contribution of $24,500. Similarly, you can contribute up to $5,500 to an IRA, with an extra $1,000 in catch-up contributions available for those 50 and older.1
You may feel like you’re already saving as much as possible. However, you may want to consider using this time to make cuts to your spending and try to find more money to save. If you can maximize your qualified account contributions, you may be able to significantly boost your savings just before entering retirement.
Develop your retirement budget.
Are you one of the 60 percent of Americans who don’t use a budget?2 We believe a budget is one of the most powerful financial tools at your disposal, as it helps you make informed spending decisions and can help you stay on course to hit your goals.
A budget can be even more important in retirement. You may need to make your assets last for several decades. That means you’ll need to monitor your spending so you don’t deplete your savings in the early years of retirement.
A budget can also be helpful as you plan for retirement. You can estimate your spending to determine how much income you may need each year. That can help you decide how much money to save annually and how to invest your funds.
Find sources of guaranteed* income.
Finally, you may want to look at strategies that may increase your guaranteed* income in retirement. You’ll likely have some level of guaranteed income from sources such as Social Security and pensions. If you’re like many retirees, however, those sources are unlikely to fund all your expenses.
Guaranteed* income is helpful because it provides a base level of cash flow. That can help you make more confident financial decisions and help plan your spending. It can also reduce your withdrawals from savings, so you can potentially preserve those assets for emergencies.
You can use tools like annuities to convert some of your savings into guaranteed* lifetime income. A single premium immediate annuity lets you convert some of your assets into a guaranteed stream of income that never changes, no matter how the market performs. You can also use tools such as variable annuities, which may offer some growth potential along with guaranteed* retirement income. However, be sure to talk to a financial professional about the different types of annuities and if they are right for your retirement income plan.
Ready to finalize your retirement strategy? Let’s talk about it. Contact us at MasterPlan Retirement Consultants. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
Investment advisory services offered through MasterPlan Retirement Consultants, Inc. a Registered Investment Advisor in the state of Georgia. Insurance products & services offered through Fricks and Associates, Inc. MasterPlan Retirement Consultants, Inc. & Fricks and Associates, Inc. are affiliated companies.
MasterPlan Retirement Consultants, Inc. & Fricks and Associates, Inc. are not affiliated with or endorsed by the Social Security Administration or any government agency.
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