We’re wrapping up our series of SPF 15 (Sound and Practical Finance) tips with these suggestions for people aged 70 and over. You can check out all our SPF 15 posts on our website. If you have any questions or comments about this series, please feel free to contact us. We’d love to hear your ideas. If you have not already done so, begin taking your Social Security. Up until age 70, Social Security benefits accumulate thanks to delayed retirement credits. So, there is a benefit to deferring Social Security until then. There is no benefit to delaying those payments past the age of 70, even if you don’t need the money right away. Take the payments and reinvest them. Don’t forget to take your Required Minimum Distributions. RMDs start at age 72. This means you must begin taking withdrawals from your traditional IRA, 401(k) or other tax-deferred retirement accounts so you can pay the tax you’ve deferred on them. If you don’t start taking your RMD each year once you reach age 72, you will have to pay an excise tax on the amount not distributed. An immediate annuity may be a good choice for you. The longer you live, the longer you are expected to live. If you have good genes and a healthy lifestyle, then you may want to consider guaranteed income choices that provide income for life. Not all annuities are worth their fees, though, so be sure to run through your options with a fiduciary advisor before your commit to a plan. Move toward less risky investments. Once you reach age 70, you don’t have as much time to make up a loss as you did when you were 30. Check your retirement portfolio allocations with a certified financial planner to make sure they match your risk tolerance. Reassess your risk tolerance. It changes as you age and begin to withdraw from your retirement accounts…. | Read More »
How to retire
It isn’t easy to retire, just ask Brett Favre and the Packers
Of all the lessons in gracious conduct including painful mistakes and sweet amends that the Packers and Brett Favre taught us during these past few years, one of the most obvious is this: it’s really difficult to retire. Once viewed as the golden years, a time for sunset walks, daily golf games and afternoon tea, retirement for today’s American worker can be fraught with peril. As appealing as it may seem when the alarm clock goes off in the pre-dawn hours and you haven’t slept well due to work stress, retirement can cause even more anxiety, especially if it hasn’t been well-planned. The first question you need to ask yourself before you consider retiring is, what do you intend to do with your time? Many people wrap their whole identity in their job title, and waste time floundering for the first few years of their retirement because they have nothing to do. Take some time to envision your own perfect retirement. Go beyond the leisurely morning coffee and stress-free Sunday nights. Ask yourself how you will fill each day. Will you pursue a hobby? Volunteer? Travel? Consult? These questions lead us to the second question you should ask yourself: Will my money last through my whole retirement. Actuarial tables only tell part of the story. You can’t know how long you’ll live or what your quality of life will be, but you can make an educated guess and protect yourself. See an advisor with a fiduciary responsibility and set up a plan. Will you need a long term care policy? Most likely you will, but the effectiveness of these plans vary wildly and you don’t want a salesperson who is looking for a commission to guide your research. Would an annuity make sense? You may want to purchase a fixed annuity as a portion of your retirement plan, but, again, these products are complicated, nuanced and they can be expensive…. | Read More »