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Retirement Planning

We put retirement planning first on our list of services for a reason, retirement is the primary goal for most of our clients.  To us, retirement planning means being able to do whatever you want with your time, regardless of how much money you earn.  This could be continuing to work full or part time, volunteering, spending more time with family and friends, pursuing hobbies, or something else.  We help our clients take responsibility for their financial lives, so they can have the freedom to do what they want with their time.

In order to accomplish these goals, we use a variety of investment and tax management strategies with the goal of helping clients not outlive their money. To help guide decisions we use powerful financial planning software and decades of experienceWe believe better decisions lead to better outcomes.  We consider unique factors for each client – age now and at retirement, social security, pensions, savings and investments, specific spending needs, and more – we can help clients make important decisions about when can I retire, and how much can I safely spend in retirement.  We have access to, and experience with, many different types of retirement accounts for individuals and organizations.  We will recommend using them as best fits the specific needs of each client.

Frequently Asked Questions About Retirement

  • When can I retire?
    • You can retire when you are willing and able to live on your assets and passive income. This income can come from social security, pensions, businesses, annuities, stocks, bonds, or other investments.
  • How can I retire?
    • You can retire by building enough passive income to live off that income. For example, you could invest in the stock market, bonds, or annuities.  You could work for a company that provides a pension; or work long enough to cover some of your expenses through social security. Usually, a combination of all of these.
  • How much money do I need to retire?
    • How much you need to retire is largely dependent on your spending needs. You need enough income and assets to support yourself during retirement.
  • How much can I spend in retirement?
    • How much you can spend in retirement is largely dependent on income and asset level. A good way to approximate your safe spending level is adding up your retirement income from social security, pensions, annuities, and other guaranteed income.  Then adding a percentage of your invested assets.  Many financial planners use 4% annually as a starting point for planning.
  • Should I retire early?
    • It depends, before you decide to retire, early or otherwise, it is important to know the answer to 2 questions. 1. What will you do with your time? 2. Where will your income come from?
  • What is the difference between a 401k and an IRA?
      • A 401k is sponsored by an employer, while an IRA is created and managed by an individual.  The annual contribution limits for a 401k are typically much larger than an IRA.  The annual contribution limit for an IRA is $6,000, for a 401k the limit is $20,5000 (2022).  An IRA has much more investment flexibility.  However, you can take a loan from your 401k.
  • What is the difference between a 401k and a 403b?
    • 401k’s are typically created by for-profit businesses, while 403b’s are for nonprofit organizations like schools, hospitals, and governments.  In practice they are very similar.  403b’s are exempt from nondiscrimination testing, however they also have income restrictions while 401k’s do not.
  • How much should I save for retirement each paycheck?
    • Assuming you have already built up an emergency fund, paid off your high and moderate interest rate debt (5%+), if you are early in your working career, a good goal is 15% of your pretax income.  If your employer offers a matching contribution, it is crucial you contribute at least enough to get their full match.  If 15% isn’t feasible right now, set your contributions to increase every year or each time you get a raise.  If you are later in your career, I would recommend speaking to a CERTIFIED FINANCIAL PLANNER™ about your options.
  • When should I take Social Security?
    • If you are single or the highest earner in your household, typically you should wait as long as you can.  Each year you wait, your social security benefit will increase by 8% (.66% /month).  This is in addition to your CPI/inflation increase.  There are very few other investments that can guarantee an 8%, inflation adjusted, rate of return.  This may mean spending other investments to bridge the gap between retirement and 70 years old.  Do not wait past 70, the increases stop after age 70.

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