Antoine de Saint-Exupéry once said, "A goal without a plan is just a wish." And we all know that retirement is the ultimate goal of every working person - the dream of dreams. You may have big ideas for your golden years, but do you have actionable steps in place to achieve those ideas? This is where retirement planning comes in.
Retirement planning helps prepare you and your family, allowing you to actually enjoy your retirement instead of scrambling to to make ends meet. There is no clear-cut path in retirement, so it’s important to consider your steps carefully. We’ve pulled together a few must-knows to help you prepare for, and enjoy, your golden years.
3 Things to Consider During Retirement Planning
Filing for Social Security
While it’s important to plan ahead for retirement, you may benefit from delaying certain tasks for a few years, such as filing for social security. At age 62, you are eligible to apply for social security benefits even though you may not have reached your actual retirement age. However, putting off filing can help you receive the maximum amount of social security money that's available for you.
Monthly social security payments increase 8% for each year that you do not claim before the age of 70. So, waiting to file is critical for building your personal wealth and not leave any money on the table. A good financial planner will have sophisticated software to help you determine the best time to start taking benefits.
Required Minimum Distributions (RMDs)
To effectively plan for retirement, it’s important to understand what Required Minimum Distributions (RMD) are and how they work. Most retirement plans, including 401k’s, 403b’s and IRA’s, require you to withdraw money each year after reaching the age of 72. The minimum amount you must take out is your RMD. Once the money is withdrawn, you must pay income taxes on it.
A person’s RMD is based on their life expectancy as well as the amount of money in their retirement account balance. So, it can be tricky to figure out the logistics of your personal plan without guidance. When working with a financial planner, they will help you estimate your RMD and remind you when they are due.
When considering retirement, it’s important not to forget about your health. You will want to ensure you have appropriate healthcare coverage so that you can enjoy your well-earned retirement years without worry.
If you plan to retire at 65 years or older, you are eligible for Medicare health insurance. When deciding which Medicare plan is right for you, it’s important to understand the different types of coverage. Each Medicare plan offers varying degrees of hospital coverage, medical coverage and prescription drug coverage. Medicare Advantage plans often provide all three coverages.
Retirement Planning with Masonboro Advisors
Despite the much-needed break from working that retirement offers there often comes more work. We understand how confusing and tedious retirement planning can be. That's why we are here to help you each step of the way.
For more information on how Masonboro Advisors can help you make the best of your retirement years, please contact us directly at 910-742-0509.
Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
Indexes discussed are unmanaged and you cannot directly invest into an index. Past performance is not a guarantee of future results.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.