Retirement can be a welcome opportunity for many and yet a daunting mountain to climb. After all, the majority of one’s life is spent working and saving for this highly sought-after goal. Life seems to fly by and you arrive at retirement season in the blink of an eye. Below, I will discuss three factors to consider. This is not intended to list everything that goes into retirement planning. It’s very important to visit with a financial planner to consider your unique situation!
Longevity in your family tree is an important factor. Probability suggests you will likely live as long as your parents and grandparents but it’s a good idea to plan on living a few years longer. By carefully planning for your projected life-span, it helps ensure you will not run out of money or be forced to reduce your standard of living later in retirement.
Learning how to maximize your Social Security is critical, along with calculating when to draw on it. Again, consider your life-span. Generally, the longer you live, the better an idea to delay drawing on Social Security becomes. Next, if you decide to delay drawing on Social Security for a few years after retirement, do you have enough savings to live on while waiting? Is that savings in the right vehicle to draw on; taxable, tax-deferred, Roth? I strongly suggest you discuss this point with your financial planner. You can also read our previous blog, “Things to Know for Maximizing Your Social Security.”
Another aspect to consider is your tax bracket. Could using specific retirement strategies aligned with your tax bracket now, help grow your wealth later? For example, you could convert or do a partial conversion over many years of tax-deferred savings into a Roth account. There are a few factors that could go into making sure this is a wise decision, including how long you’ve had a Roth account, your projected life-span, tax-bracket and your current estate plan.
Making any one of these decisions should not be taken lightly as each has the potential to make a dramatic impact on your ability to enjoy your retirement. The goal is to have peace of mind and know that you will never have to go back to work. If you need help thinking through these factors or other retirement questions, contact us at 217-935-2148 and we would be more than happy to assist you in your journey.
At First National Bank and Trust, we IGNITE PROSPERITY® by helping our clients do more with their money. Whether it’s saving a little extra cash each month or accomplishing a long-term strategy, our goal is to help you transform your financial life. Call and schedule an appointment today, one of our team members would love to help you do more with your money at FNBT. For more information visit firstnbtc.com or call 217-935-2148. #igniteprosperity
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Investment products offered by First National Bank and Trust Company are: • Not a Deposit • Not FDIC Insured • Not Insured by any Federal Government Agency • Not Guaranteed by the Bank • May Go Down in Value