Before we get into the how in regards to retirement income planning, what exactly is a retirement income plan?
A retirement income plan is a year by year timeline that provides insight on where your retirement income will come from and where it will go. You can easily use tools available to you like graph paper or an Excel spreadsheet in order to stay organized.
Here are some easy steps to follow in order to get the ball rolling on your retirement income plan:
Tip #1: Assess your Budget and Expenses
Before planning for retirement, or any other kind of savings fund, it is best to flesh out what your budget and expenses look like. For a lot of Americans, we simply do not know where some of our money goes and we don’t have the knowledge to track our spending. Track your spending and find out what is being spent the most on. By pulling back on certain, frivolous things, you can find ways to optimize the money that you will throw towards retirement.
Tip #2: Create a Template or Chart
It can be very helpful to visually see everything laid out in a chart in order to decrease stress around retirement planning. With a template, you can input rows for each calendar year from your respective age to your projected life expectancy. With each box you can input how much you (and if you have a married spouse) plan to put in every year in order to have a fruitful retirement. This helps to visually map out amounts and years in order to keep organized.
Tip #3: Add Retirement Income
Within the template that we discussed above, do input any fixed sources of retirement income in order to plan for that money as well. Fixed retirement incomes can be your social security, your spouse’s social security, any pensions, annuity income, life insurance money, etc. Identify on the timeline where you expect to receive these fixed sources of retirement income and how much you project to receive after taxes.
Tip #4: Add your Expenses
To this template, add any estimated expenses and when you project to pay them off. For example, if you are currently paying a mortgage on your house, add up that expense to other monthly expenses, add it to your chart, and also take note of when you plan on paying off the mortgage on the home. The tax rates will vary based on different factors like total income and deductions, so it is recommended to do tax planning in order to project how much you will have to pay in taxes.
Tip #5: Calculate and Account for the Gap
Within your retirement income plan, you should calculate the gap. The gap is considered a deficit taken out of savings, or a surplus available to savings. In order to do this you fist add up your income sources. Then subtract expenses like living expenses, mortgage, and taxes. If this gap is a negative number this is the number you would withdraw from savings and investments in order to have the retirement you desire. If the gap is a surplus amount, then you have the necessary sources of income already in order to provide the retirement life that you desire.
Tip #6: Consult with an Advisor
Although these tips are helpful in the retirement planning process, it is still a good idea to consult with an advisor in order to create the best retirement plan for you. There may be certain aspects of this plan that require closer assessment, and an advisor is a great way to iron everything out. Retirement is a large aspect of life that we don’t want to mess up on. Most people, especially here in Florida desire to have a fruitful, relaxing retirement and in order to do so, there are necessary steps to take during our lifetime. In order to minimize the risk of missing a detail or incorrectly panning, an advisor is a great resource to have!
Why Choose Capital Choice Advisors for Your Retirement Plan
As I have stated above, having a retirement plan advisor is a great tool and resource to take advantage of. With retirement plan advisors, they specialize in strategically planning and designing the retirement that you desire. Here at Capital Choice Advisors, we are founded on the notion of being truly independent and objective educators on wealth management. Our only goal is for you to succeed and find financial peace in retirement. We have worked alongside people of every financial position and have successfully grown and protected the wealth of those individuals. With our assistance, we guarantee to find the safest and most effects ways to grow and protect your wealth, without making financial decisions you may regret later on down the line.
Here at Capital Choice Advisors, we work alongside you in designing a plan that meets all of your needs, as well as guide you towards a secure and fruitful retirement. We take our company’s objectives and put forth a plan in reality that will benefit you and reach the goals you have for your retirement. We provide the education, resources, and tools necessary for you to also understand your retirement and how we can grow your money. With our guidance, we can assess and in turn, help you understand the ways in which we can grow your money and how much you’ll need to save in order to meet those retirement goals. Overall, we at Capital Choice Advisors are here to help. We want to strategize a plan for you that meets your needs, as well as equip you with the knowledge to know financial peace in retirement.