Today, there’s no single way to retire. Sure, some people still choose to put the working world completely behind them, so they can focus full-time on their golf game, grandchildren, travel, or even study. Yet increasing numbers of retirement-age Americans are deciding to remain in the workforce on a part-time or even full-time basis. Some want to maintain income. Others want to stay active, or simply try something new.
Whatever your vision is for your own retirement – early, late or never – it’s never too soon to start planning. Planning for money when you need it, freedom when you want it, and peace of mind 24 hours a day.
Your retirement planning starts with one simple question. What lifestyle do I want when I retire?
Next you need to consider how much to save in order to live in your desired lifestyle. Say your goal is a yearly retirement income of $80,000; you may require over $2,000,000 in investments to achieve that. What’s right for you?
At Retirement Pathways we can help you find the answer by sitting down with you and discussing your goals for retirement. Do you plan to travel often? Buy a new home? Buy a vacation home? Move closer to the grandkids? Have you considered your health care expenses?
Depending on these goals, and the phase of life you’re in, we will help you formulate a retirement plan and income strategy to help you be prepared when you choose to retire.
Retirement and Health Care Planning Resources:
Social Security site
U.S. Government Site for Medicare
Find help in your community
Find benefit programs for medications
Individual Retirement Accounts or IRAs are retirement plans that provide many tax advantages for retirement savings. While Traditional IRAs offer the benefit of tax-deductible contributions, Roth IRAs offer the benefit of tax-free withdrawals. This means that though contributions made to a Roth IRA are not tax-deductible, withdrawals made once allowed are 100% tax-free.
Deciding which IRA is best for you can depend on many factors such as your current income, your anticipated retirement income and your age. Retirement Pathways can help you determine which type of IRA is right for you. We also offer assistance in Traditional to Roth IRA conversions or setting up Stretch IRAs that pay out to beneficiaries for years to come. It is important to include your tax advisor, or CPA in any tax related decision process.
Once the decision is made as to the type of IRA, the next important consideration is how much to add to your IRA. There are limitations by the government depending on your age and income. Those limitations can be found in the IRS Publication 590.
Social Security benefits offer a nice supplemental income to any retirement plan. If you’re nearing retirement and are curious to know how much Social Security you qualify for, click here.
Many are curious as to how Social Security benefits are calculated. The benefits are based on your lifetime earnings. First, your earnings are adjusted for changes in average wages over time, or “indexed.” Once indexed, Social Security takes your average monthly earnings from the 35 years in which you earned the most. This formula determines how much you will receive once you reach full retirement age.
When should you begin taking social security? As with most financial issues, it depends on a variety of factors. Retirement Pathways will discuss your situation with you and help you determine what will benefit you. Begin thinking about this decision and take a look at the link below for a quick overview.
What if you want to continue working? There can be limits on how much you can earn and still receive Social Security benefits. Click here to find more information.
Enrolling in Medicare – How Do I Sign up for Medicare Part A & B if I am close to age 65 and get or can get Social Security benefits? Click here for more information.
Beneficiary planning can seem straightforward, but there are tax pitfalls to avoid. Changes in your life should alert you that it is time to review your designated beneficiaries. Retirement Pathways can guide you through the methods for planning your legacy, to help your heirs avoid unnecessary tax burdens and ensure that your wishes are carried out as intended.
Stretch IRAs, for instance, allow your beneficiaries to continue to draw earnings from your IRA savings even after you’re gone. Retirement Pathways can walk you through this process to benefit both you and your loved ones.
You don’t have to be rich for you and your family to benefit from an estate plan. Wills and trusts are basic legal tools that help make sure that your spouse and children are protected if you aren’t around to look after them. Retirement Pathways will work with you, your accountant and attorney to devise a plan that’s true to your wishes and values.
But estate planning isn’t all about worst-case scenarios. It can also be about seeing your legacy in action in your lifetime, by giving an endowment to a favorite institution, by financing the education of a child or grandchild, or by arranging for the transfer of ownership of a family business. Regardless of what shape you’d like your legacy to take, Retirement Pathways will work closely with you and your attorney and tax advisors to help your vision become a reality.
Read more about the estate tax exclusion by connecting here:
What’s New Estate and Gift-Tax
It used to be that when people thought about philanthropy, it was in terms of cash donations to education, cultural institutions or hospitals. Today there are as many ways to give a gift as there are organizations and causes to receive one. Navigating this sea of choices is just one service that Retirement Pathways can offer as you construct your wealth management plan. From straightforward donations to more elaborate private foundations, Retirement Pathways can offer a wide range of solutions that will help you make the most of what you have to give.