Senior couple hugging

Retirement

PLANNING

Corporate has 401k, Teachers have 403b, and Government, Federal, and State employees have 457s. These 4 numbers are just tax codes. They are also retirement saving accounts that each industry utilizes to help their employee or workers save for retirement while creating a huge tax break for them. If you are an Entrepreneur, making contributions to a Roth IRA would be your best bet. Contributing a percentage from your income to a savings account is how most begin saving or planning for retirement.

 

Most companies do not offer pension plans any longer. 401k's are less expensive and in 1978, Congress approved THE REVENUE ACT of 1978, which allowed the implementation of 401(k) plans. This plan was introduced by the government to "employees because it gave them options for retirement outside of the standard pensions plan" (Forbes | Where did all the Pensions go? | Impact Partners Contributor 2018). 

 

Create Retirement Goals

The days of working for companies for 25 plus years are long gone. Less, than 20 years ago, baby boomers occupied most of the work force. The culture and mindset is totally different now. The eighty's babies and millennials are living in the age of information. Not only are we living longer, but more and more entrepreneurs are emerging and the way we used to do things when it came to Retirement Planning is a "thing of the past." Creating a Retirement Plan is essential to your livelihood. It is literally creating a long term savings plan

   The Biggest Concern retirees have is running out of money.

ACT: SAVING | INVESTING

Priority 1: Determine a monthly number you will need to live on once you are no longer working to generate an income. 

Priority 2: Determine if there is a gap. An income gap is determined by writing the amount you will need in retirement minus the amount you will have coming to you in retirement (i.e. Pension, Social Security).

Priority 3: If you have a supplemental retirement account, Great Job on planning for your future self. But if you do not have a retirement account, consider contributing to your future income. Also, get help! There are licensed financial professionals who can assist.

Plan to Live Longer

FINANCIAL RISK SPECTRUM

When you're creating a financial plan, there is no one "best" product. But there are products that can be a better fit in order to help meet your goals for retirement, whether you're experienced or just getting started.

Stocks

Mutual Funds

Variable

Annuities

BONDS

Fixed index 

Annuities

Fixed 

Annuities

CDs

BANK Money Market Accounts

CASH

Principal/premium protected

Principal/premium not protected; can lose value

RISK

Fixed Index Annuities offers protection from market downturns and are great when planning for retirement.

This chart is only meant to serve as a general guide. It does not represent any guarantees of performance individually or performance correlation or safety of the above listed vehicles.

What is your Attitude towards Risk?

This is called Risk Tolerance.

What do you expect to be your next major expenditure?

Over the next several years, do you expect your annual income to increase?

Would you say you are conservative, moderately aggressive, or aggressive when it comes to saving and investing?

How much money

will you need in retirement?

One method of retirement planning is to project what you are currently saving and have accumulated to date and see if you will have enough to meet your retirement objectives. Use this calculator to determine when/if the money will run out during retirement and it will recommend additional savings if required.

-CalcxML

40% of your income in retirement will come from your Social Security

Calculate your Social Security Amount - Retirement Estimator

To qualify for Social Security, you must have worked 40 quarters = 10 Years

The Retirement Estimator gives estimates based on your actual Social Security earnings record.

Please keep in mind that these are just estimates.

TIme is a wonderful asset, especially when it comes to saving for retirement.

PORTFOLIO INCOME

-Dividends

-Capital Gains

-Interest from bond

-Distributions from IRAs, 401(k) and investment accounts

Growth

TAX - Deferred

Tax Tomorrow

IRA

401(k)

403(b)

457(b)

PREDICTABLE SOURCES OF INCOME

-Pensions

-Social Security

-Annuities

Income

Taxable

Tax Today

Bank

Brokerage

ESTATE PLANNING

-Life Insurance

-Living Trust

-Will

-Health Care Directive | Proxy

LEGACY

Tax-Free

Tax Never

Life Insurance

Roth IRA

Roth 401(k)

Roth 403(b)

Roth 457(b)

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