|
Retirement Income Planning |
When it comes to retirement planning, almost all of the emphasis that the typical individual sees and hears about focuses on one thing, and one thing only: asset accumulation. Asset accumulation is most often done these days through contributing to a 401k or other similar qualified, employer-sponsored account. Countless articles are written on how much money one needs to save for their retirement and the Internet has numerous (unsophisticated) calculators to help ballpark an answer to this question. There are lots of TV pieces about asset allocation in a 401k or IRA, what is the best sector to be invested in or what’s happening in emerging markets, and the like. But asset accumulation is only half of the battle. Asset accumulation is akin to climbing a mountain and reaching the summit. But the real goal is not to reach the top of the mountain but rather to reach the top of the mountain and then SAFELY GET BACK DOWN TO THE BOTTOM! And when it comes to mountain climbing, more people sadly die on the way back down the mountain than do on their way up.
Retirement income planning is about getting back down the mountain safely: making sure that your accumulated assets provide you with a lifetime’s worth of income to support you through your retirement, which could last 30 years or more. It’s about using your assets and income to create a strategy that will provide for your basic needs in retirement and have the income that will allow you to do what you want to do in retirement, such as travel, play golf, volunteer, spend time with the grandkids, etc. With the burden of retirement planning shifted to workers through the emphasis on 401ks and the demise of traditional pensions, it is imperative that you have a plan in place to provide income in retirement. Pension plans, coupled with Social Security, filled this need quite nicely historically, but pensions are a dying breed and it’s now up to the worker to figure out how to provide this income in order to have a fulfilling and enjoyable retirement.
Compounding all of this complexity is taxation: the vast majority of 401k assets are in tax-deferred accounts and not their Roth counterparts. This means that for those 401k accounts you have a partner: the federal government. Not only is this an undesirable partner, but Congress gets to decide through the tax code just exactly what your share is and how much they’re going to take. This can be mitigated in a retirement income plan through tax diversification, but it takes planning and execution in order to keep as much of your hard-earned money as possible.
I have earned my Retirement Income Certified Professional designation through The American College of Financial Services and I’d enjoy the opportunity to work with you in developing your retirement income plan. We’ll work to ensure adequate income throughout retirement, minimize taxes, and also allow for the potentially devastating cost of long-term care should you need it (70% of 65-year olds will need it at some point). Please contact me at jeff@jeffdietzfinancial.com or 804.608.9775 and we'll get started on a retirement income plan to enable an enriching and sustainable retirement.
Please click here to take The American College Center for Retirement Income's Literacy Quiz.
Retirement income planning is about getting back down the mountain safely: making sure that your accumulated assets provide you with a lifetime’s worth of income to support you through your retirement, which could last 30 years or more. It’s about using your assets and income to create a strategy that will provide for your basic needs in retirement and have the income that will allow you to do what you want to do in retirement, such as travel, play golf, volunteer, spend time with the grandkids, etc. With the burden of retirement planning shifted to workers through the emphasis on 401ks and the demise of traditional pensions, it is imperative that you have a plan in place to provide income in retirement. Pension plans, coupled with Social Security, filled this need quite nicely historically, but pensions are a dying breed and it’s now up to the worker to figure out how to provide this income in order to have a fulfilling and enjoyable retirement.
Compounding all of this complexity is taxation: the vast majority of 401k assets are in tax-deferred accounts and not their Roth counterparts. This means that for those 401k accounts you have a partner: the federal government. Not only is this an undesirable partner, but Congress gets to decide through the tax code just exactly what your share is and how much they’re going to take. This can be mitigated in a retirement income plan through tax diversification, but it takes planning and execution in order to keep as much of your hard-earned money as possible.
I have earned my Retirement Income Certified Professional designation through The American College of Financial Services and I’d enjoy the opportunity to work with you in developing your retirement income plan. We’ll work to ensure adequate income throughout retirement, minimize taxes, and also allow for the potentially devastating cost of long-term care should you need it (70% of 65-year olds will need it at some point). Please contact me at jeff@jeffdietzfinancial.com or 804.608.9775 and we'll get started on a retirement income plan to enable an enriching and sustainable retirement.
Please click here to take The American College Center for Retirement Income's Literacy Quiz.
