Now that 2016 is over, and the election that consumed us is, too, thank goodness, it’s time to turn our thoughts to other things.
The Trump administration is laying the groundwork for the years ahead, and you should be, too. Why not make 2017 the year that you move from basic financial planning to preparing for financial independence?
What’s the difference? Most people look at financial planning this way: “I’ll put some money into this investment here, and some money into that investment there, and see what happens.” When you’re working toward financial independence, you’re looking at all aspects of your plan to help ensure your outcome is what you want it to be in retirement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you’re within 10 years of retirement, or if you’ve already retired, these are the things you should be looking at in 2017:
1. Risk exposure. Right now, the Standard and Poor’s 500-stock index is in its 94th month of a bull market. It’s the second-longest bull market in U.S. history. And that’s great. But it can’t last forever. The average bull market runs 54 months.
Our last bear market lost approximately 57%. If you’re in your 20s or 30s and you’re consistently buying into the market, a downturn or major correction typically won’t hurt you in the long run. But if you’re retired or approaching that window, that volatility could be detrimental to your future. It’s time to re-evaluate the risk in your portfolio.
2. Tax planning. Tax efficiency is one of the best ways to keep more money in your pocket. Sit down with your adviser (make sure he or she has the tax qualification necessary to assist you) or CPA and look at ways to keep your taxes low. Whether it’s a Roth conversion in the future, municipal bonds or possibly annuities, take control now to help ensure that more money stays with your estate.
Most people sit down with their CPA once a year, at tax time. The CPA takes their information, punches in some numbers and says, “Here’s what you owe,” or “Here’s what you get back.” It’s a reactive way to deal with tax planning. Be proactive this year.
Meet with your CPA or adviser before the year is up. This will allow you to put strategies into place that will help you keep your taxes under control.
3. Expenses. Sit down and look at how much you spend month to month. I don’t know anyone who isn’t shocked when they see that amount.
It’s a difficult moment, but it’s something you should know about yourself to be able to plan out your retirement – vacations, golfing, visiting the grandkids. You can use software programs, or just keep an eye on your monthly bank and credit card statements. You’ll soon see your spending patterns – and perhaps some things you can change.
4. Long-term care planning. What could happen to your retirement if you have a health issue? Most people are unaware of how quickly long-term care costs can impact their nest eggs. Annuities are one option to keep yourself covered in the event of a health crisis while keeping your money accessible. And if you don’t have any health problems, that money often can be passed on to your beneficiaries tax-free.
5. Wealth transfer. Make sure you work with a qualified attorney or professional to create an estate plan that can help make sure the money you don’t spend is passed on to your children, other family members or charities of your choice. This might mean creating a living trust, crafting a will, buying life insurance and/or creating an inherited IRA that could allow your children to take your tax-deferred savings and keep the taxes low.
This is quite a list, and if you’re overwhelmed, you can take it one step at a time. But to work toward your financial independence, you’ll need to take into account these considerations – and the professionals who can help you with them – working together.
Many times, people will have an attorney, an insurance representative and a financial adviser, but they aren’t working together. This is your year to change that, and to help shield yourself from the potential pitfalls that some Americans face during their retirement years.
Reid Abedeen is a partner at Safeguard Investment Advisory Group LLC. As an investment adviser, he has helped retirees for more than 18 years with issues such as insurance, long-term care planning, financial services, asset protection and many other areas. He also holds California Life-Only and Accident and Health licenses (#0C78700).
Kim Franke-Folstad contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market TodayThe last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
-
Already Hit Your 401(k) Limit in 2025? Here's What to Do NextMaxed out your 401(k) contributions, but still want to tuck away money for retirement? Here are seven ways you can take advantage of being a super saver.
-
How Much Income Will an Indexed Annuity Get You? An Annuities Expert Lays Out the NumbersGuaranteed lifetime income sounds great, but how much will it be? Several factors determine your future payout on indexed annuities with an income rider.
-
Financial Fact vs Fiction: Why Inflation Is Lower, But Prices Are NotDo you think bonds protect you from stock losses? Are you confident your assets will go to your intended heirs if all you have is a will? Think again — and read on for other myths that could be leading you astray.
-
I'm a Personal Finance Expert: Here's the Truth About Using AI to Plan Your RetirementAI can be a useful tool, but it often gets important financial information wrong. It also can't emulate the empathy, judgment and personal connection you can get with a human being.
-
You Don't Have to Be Wealthy to Need a Wealth ManagerNavigating complex financial decisions is hard on your own, no matter how much money you have. A wealth manager can provide comprehensive financial planning, investment management, risk management and more.
-
Despite Tariffs, These Investment Experts Are Bullish on European EquitiesEuropean equities were one of the better-performing investments during the first half of 2025. They could be a good long-term prospect for U.S. investors needing to diversify, according to these investment managers.
-
How Do You Know You Are Ready for a Gray Divorce? 15 Yes-or-No QuestionsAs more people 50 and older get divorced, many splits are initiated by women who want a new path. Answer these 15 questions to see if you might need to think about how you should move forward.
-
'Buy Now, Pay Later' for Everyday Spending? This Financial Pro Thinks It's Risky'Buy Now, Pay Later' apps can get you out of a jam when you need money quickly. But using them regularly for small purchases could create problems.
-
Five Things to Consider Before Rolling Your 401(k) into a Roth IRAConverting at least some of an old 401(k) to a Roth IRA can offer long-term tax benefits and retirement flexibility, especially if you anticipate being in a higher tax bracket later or wish to leave a tax-free legacy.
