Call Now: 888-532-7240
Should I Hire a Professional Retirement Planner?
There are definitely some benefits to hiring a professional for retirement income planning. The truth is, a professional spends their days studying the market and learning the ins and outs of the business. Most of us who aren’t in the business will get involved in one retirement plan, and it’s pretty important one at that! Retirement income planning is a combination of many different facets and many different core competencies, all of which a financial planner can help with. Different planners have different specialties, but they all have a great deal of knowledge and referrals if need be.
How Much Money You Can Live on After Retirement?
The first part of retirement income planning starts long before one retires. Ideally, the process starts by putting together a budget, thinking about the changing levels of expenses as you get older, trying to anticipate changing health needs, changing residential needs and the impact of children leaving the nest. All of these things are different, and they are unique; however, a financial planner can help you quantify these changes. Many people are uncertain whether they will need the same, less or even more money in retirement than they needed when they were working. The questions can only be answered by a lot of number crunching and some critical thinking, either working on your own or working with a professional. Once you have determined the amount of money you will need after retirement, you can start the real exciting part of the process; figuring out where that money will come from!
Consider Other Retirement Income Sources
A large part of retirement income planning is figuring out exactly what your options are for additional income sources. For example, have you considered how Social Security Income may play into your retirement income? Social Security may be available for you and/or your spouse. However, did you know that there are nine different ways that one can take social security? Between you and your spouse, that means there are 81 different combinations in terms of how social security might be taken off of your work record! Good luck trying to figure that out through the maze of plans. Even the longest ten year professionals occasionally need help figuring it out!
Another option that may be available if one of you is working, is a pension plan. You’ll need to look into options that are available to you. If you find out you do have options, you’ll need to consider some other questions such as, if they are offering you a pension, but they are also offering you a lump sum? Which is the right choice? It’s difficult to make any absolute choices in terms of what is the right decisions for someone to make, but with diligent research and progressions you and your advisor can come up with some pretty clear conclusions. Those conclusions will be based on a number of considerations; your feelings about risk, the internal rate of return that the pension provider is offering you in terms of your lump sum amount, how long longevity lasts in your family, and secondly, which is more important, security of the income during your life or potentially, or even how much you plan on leaving behind for your descendants. All of these are questions that you’ll have to wrestle with
Options For Your Investments
If you are in the position of having a 401(k), Roth IRA, savings, investment accounts or similar, congratulations, you’ve been a great saver! The next question is, when and how do you get your money out? Like everything in financial planning, the options are many and numerous. Depending upon the individual and the industry outlook, some people believe in dividends, income, annuities, fixed annuities, or life annuities, just to name a few! There are all kinds of different choices out there to address almost any situation. However, again, when it comes to retirement income planning, it is how all of these things work together that is the most important thing for you.
Start early, review every so often, and most importantly, understand that the success of your retirement income strategy will be dependent most upon being a good saver, understanding how much you need and having a proven strategy.
