When it comes to planning our retirements, many of us lose sleep over what will happen when we no longer have regular paychecks coming in and have to rely on our investments. We often struggle with making the transition from working full time to retirement — and plenty of pre-retirees can’t even imagine life without a salary.
All of us face a number of questions as we move through our 50s and early 60s.
- Can I quit working?
- Is it OK if I retire?
- I want to retire in the near future, but can I afford to?
- How do I make sure the money I have saved my entire life is going to last?
- Do I have enough saved?
- When should I start taking Social Security?
- How much should I take from my portfolio?
We all have questions, and none of us knows all the answers.
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.
Income is the answer
That’s where a good retirement planner can help. Simply put, the cornerstone of any good retirement strategy is income planning. So much of our retirement hopes depend on how we manage our money, especially since most of us want to continue living our current lifestyles while in retirement. We want to stop working, have enough income to remain comfortable even without paychecks coming in, and, most important, know we are financially secure. We want to know we are on the right path and ensure we don’t outlive our money, something that is increasingly common as people live longer.
No matter how good we are at managing money, many of us simply don’t understand how much we are going to need to withdraw from our portfolios to enjoy a comfortable retirement. We look at our expenses from our working years and come up with a guess.
But, even with all our number crunching, we often underestimate how much we will actually need to sustain our lifestyles in retirement. Too often, we tell ourselves that we will spend less in retirement, but that’s not the case for many of us, especially if we want to travel or do things we never had a chance to do while working. We also do not factor in rising medical expenses and long-term care costs.
Ensuring a comfortable retirement
All of this underscores why a retirement planner should be consulted. A good one can offer a realistic appraisal of your finances and your lifestyle to ensure you enjoy a comfortable retirement, instead of just giving you strategies to withdraw a certain amount of money each month from your portfolio.
A retirement planner also can offer you a survivability analysis, which provides answers on what happens to Social Security, pensions and other sources of income that could be lost when a spouse passes away. As unpleasant as it is to think about, you need to consider what will happen if a spouse is left on his or her own and factor that into your plan.
An experienced and knowledgeable retirement planner also can help you turn your savings into income. Many of us have structured our income plans for retirement on the assumption that the stock market will consistently go up. Of course, as anyone who remembers 2008 can tell you, that’s not going to happen. You need to make sure your retirement can survive the volatility that remains a core part of the market. A retirement planner can help you examine how much downside there is to your investments and how much risk you can manage, helping ensure you have a secure retirement. He or she can stress test your current financial plan and analyze where you might be vulnerable.
By looking at your income and analyzing your lifestyle needs, retirement planners can help you find the right path to a secure retirement. When you draw closer to ending your career and starting on this next step of life, you should consult a retirement planner.
-
The Retirement Bucket Rule: Your Guide to Fear-Free SpendingForget market declines or rising inflation. With this strategy, you won’t have to worry about any of that during retirement.
-
How Big Will the Fed Rate Cut Be This Fall?A dismal July jobs report has lifted expectations for fall rate cuts. But just how low could the fed funds rate be by year's end?
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's GuideWhen the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting TipsYou're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a PortfolioExchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term CarePlanning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
-
Five Questions to Help Ensure a Happy, Secure RetirementYou need to drill down to what you really want out of retirement. Then you can get down to the business of crafting a financial plan to make it happen.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting ByLearning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
How to Buy an Annuity Online (Without Regret)You should never be rushed into buying an annuity. But now that they can be sold quickly and easily online, you need to be more alert than ever to pushy salesmanship. Here are four signs you're working online with a professional.
-
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.
