Tag: retirement income
How much money do I actually need to retire? ($50K, $70K, $90K or $100K a year?)
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
How much cash do you need to retire on? It'' s among the most usual concerns I hear. Now I wish i can offer you a straightforward solution. You may have heard you require a million dollars or that you ought to have sufficient
savings to supply a revenue state equal to about 70% to 80% of your final income. The most typically priced estimate figure is in fact.
based upon ASFA'' s retired life criterion. Now ASFA approximates that a couple age 65.
would certainly require to invest around $63,000 a year to live a comfortable lifestyle as well as around.
A single person would certainly need a little much less regarding $44,000 for a comfy retired life or $28,000 strange bucks for a small one.
of life you intend to reside in retired life. Rest down and work out a retired life spending plan. Start with the essentials like how much food, apparel, transport you anticipate to invest. And after that determine those nice-to-haves like dining out, holidays and also hobbies. The final element to look at is any type of luxury products that you might want to get like a caravan. Your next point is when do you wish to retire. The earlier you want to retire the more money you'' ll demand to fund that retired life. And also there'' s no collection old age in Australia. The decision is up to you yet benefiting longer also on a part-time basis can assist you retire stronger. Now finally is your life span. This one'' s going to be a little more trickier to predict but extensively speaking women today can anticipate to live to 85 and guys to 81.
Let ' s say for circumstances that you do the amounts and you locate your retired life lifestyle will certainly cost you around$ 40,000 a year. If you prepare to retire at 65 as well as you have a life expectancy of regarding 85, you ' re looking at 20. Consider talking to a qualified monetary consultant if you ' d like some assistance grinding these numbers.
It ' s complete of wise approaches to help develop. Download it today.
Retirement Planning for Singles
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
the initial step is to figure out what type of revenue you ' re going to need, as well as I ' ve obtained other video clips on that, I ' ll put web links in the summary to get you some more info, but you can look at replacing a part of your earnings, or you can simply claim, I desire X amount of dollars per year, or you can go with various other methods, however initially we require to know how much earnings you are hoping for. You will certainly want to look at taxes as well as rising cost of living, so during your retired life years, it ' s affordable to presume that costs may boost on many of the points you get, so we desire your income to be able to enhance as well, Social Safety generally does climb, but perhaps not at the exact same price as the points you ' re acquiring, so your withdrawals may need to account for that.Plus we ' ve got tax obligations. And so you may claim, you ' re possibly not going to get the best, you ' re probably not going to obtain the worst, although anything is possible.So that ' s exactly how we go with this probability of success.
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5 Retirement Mistakes People Regret
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
as thrilled as most of us are to be able to retire sadly it'' s very very easy to begin off on the wrong foot as well as make a mistake that we'' re going to regret later on right we all have One Life to Live and also for a lot of us this is the very first time that we'' re retiring but as a financial consultant for over two decades I'' ve had the advantage of of seeing several lots of households shift to retired life I'' ve seen households do it efficiently and also I'' ve seen families choose that they recall later on and also regretted I wear'' t wish to see that happen to you so in today ' s video clip I ' m going to show to you the five most usual mistakes that I see people make as well as the initial one as well as which is extremely crucial it'' s it ' s important to have a strategy if you and yes I'' m biased since I ' m a financial expert but if you'wear ' t have a plan you ' re either the odds are substantially against you'you ' re either going to be investing way too much cash or you'' re not mosting likely to be investing adequate money in the Years where you might have had you recognize you have as most as much power as you'' re ever before mosting likely to have most likely you'' re the youngest certainly you'' re ever before going to be and also you ' re probably the healthiest that you'' re going to be in retirement'right if you ' re 60 years of ages sadly most of us at 60 have less than a thousand weeks continuing to be of healthy active time so we wish to obtain this right and I assume the way you get it ideal is not by trying out and also investing but by having a plan and also and having someone that'' s experienced these strategies make sure you ' re thinking of the the best point so that you'' re you ' re not ignoring a cost that that could be important or you'' re not and also I see this a lot ideal people are compromising needlessly and also I wear'' t intend to see that'occur to you to ensure that ' s the very first one you recognize this'is a big shift so it'' s not simply a monetary strategy however it ' s additionally a plan for just how you ' re are mosting likely to spend your time you know what ' s crucial to you analyzing beforehand what are things that you understand retired life indicates to you and afterwards seeing to it you enter with both feet and as well as you do that to ensure that ' s number one is the need to have a strategy number two is you recognize just how are you mosting likely to remain linked how are you mosting likely to have relationships um because you'recognize we spend a lot of our waking hours at the office today if you ' re not retired and also a great deal of our colleagues a whole lot of our colleagues a whole lot of our informal pals we have with job and also when that ' s gone when we lose that how are we mosting likely to remain linked how are we going'to make new good friends it ' s actually vital what are the connections exactly how are you mosting likely to stay social so simply consider that some believed in advance of time okay to make sure that'' s number two I intend to encourage you to remain to the end since at number 5 is is one that I assume is vital and also after that complete disclosure I'' m mosting likely to provide you an incentive here at the end all right let'' s delve into number three number 3 is thinking with Healthcare not just the expense of health and wellness treatment yet that'' s mosting likely to help you you understand when you go to if you have to go to the medical facility if you need to have surgical procedure you understand that ' s mosting likely to take you to the hospital at five in the early morning yes Uber ' s around however you recognize it'' s actually nice if you have a a pleasant face when you get up after surgical treatment somebody that can be there for you is somebody that appreciates you somebody that you have a partnership with so think of that as well as just see to it you have those individuals in your life and also if you put on'' t do what you can begin constructing those now however there'' s there ' s Healthcare from a relationship point ofview and afterwards of course there'' s Healthcare from an expense perspective and from an insurance coverage standpoint as well as if you'' re retiring before 65 you ' ve obtained that Void'right you ' ve obtained the space in between when you have health care insurance coverage and when you put on'' t there ' s a number of methods to bridge that Space it ' s outside of this video clip but give some believed to that right you can do Cobra you can get insurance policy on the exchange you can purchase insurance coverage on the personal market there'' s what ' s called Health and wellness shares that you can think of doing none of this is money Mutual recommendations I put on'' t know your'scenario I ' m not a health care expert however I simply encourage you to that must be something on your radar display that must be something that you check into or work with a specialist that can help you believe regarding that fine next I assume it'' s important um you know there'' s it appears like nowadays there'' s many life instructors uh as well as as well as I make use of a company coach and also I have for yours and it'' s made a huge big distinction in my life and I assume when you retire whether it'' s a buddy of your own that you know they ' re gon na perhaps they ' re five years ahead of you in retired life just sit down as well as say Hey you understand would certainly you agree to be my trainer you know most individuals would certainly be honored by something like that um or hire somebody it doesn'' t need to be crazy expensive to have a coach and truly you simply want someone that'' s additionally ahead of you on the Journey certainly the only financial experts can function as that train for you as well yet there'' s great deals of various ways to get that training however I assume the reason I believe it'' s vital to have a trainer is you might desire to Rotate best yeah we have these presumptions regarding what retired life is mosting likely to be and full disclosure individuals that I see have problem with retirement one of the most are generally the ones that are one of the most ecstatic about retirement to start with right they they feel this is going to be like trip I put on'' t need to set my alarm anymore if I most likely to Secret West to go fishing I can stay as long as I desire as well as all that'' s true but you understand 24 hours a day can be a lot of time to fill so like with any type of change in life there'' s benefits and drawbacks in that very first couple years when you'' re making that shift it'' s a whole lot much easier if you have a train in the process I put on ' t recognize if you bear in mind in college however also you recognize even when I was an university freshman which was a while ago believe me they kind of had like you know the Big Sibling Big Sibling system where somebody that was a student would certainly kind of Coach you on you know exactly how do you be successful as a fresher and I believe America would would be well served if we had sort of the large bro those huge sibling system for retired life as well or you understand employ a professional life instructor or work with an expert fee only monetary advisor but I intend to encourage you to expect that you'' re mosting likely to desire to Pivot and also as well as provide yourself the consent and also the freedom to Pivot all right the following one young boy our health is so vital right and also how you begin retirement those are the habits those are the foundations that you'' re going to construct your retirement off of so I simply urge you right from the starting to deal with your wellness take you have a whole lot even more time once you retire invest that time one of things you need to invest that time on as well as you know none of this is advice for you yet I believe this uses to everybody is keep your wellness up so spend some of that time on looking for much healthier foods cooking more commonly healthy and balanced foods making the effort to head to the gym seeing with your physician as well as and learning hey you recognize what can I do to remain in as good of a as excellent a health and wellness as I can for as long as I can so simply invest in that I believe it'' s mosting likely to repay in Spades all right as well as as well as um um the last one currently for the benefit below before I arrive if you'' ve enjoyed this video do me a support hit such button all right the last one is it'' s frequently retirees will claim well now I have a great deal of time so I can cut my very own lawn myself I can cleanse my residence you recognize what if you can manage it don'' t consider all the leisure time that you have yet believe concerning just how much time you have remaining and also as I claimed earlier the ordinary person in retirement however sorry motorcycle passing regrettably most of us have less than a thousand weeks staying that'' s not a whole lot of time so don ' t hesitate to purchase yourself don ' t hesitate to have somebody do the jobs that you put on'' t take pleasure in doing so you can spend your time doing what you'' ve worked so hard for as well as you can delight in as much of the moment as you can I hope you can likewise appreciate this video clip up below that discuss ordinary revenue for senior citizens in America in this video clip down right here that speak about five reasons to believe regarding retiring as soon as you can thanks for viewing bye bye
How to Avoid Tax on Retirement Withdrawals
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
When you utilize cash from pre tax retired life accounts, you generally owe revenue tax obligation, but there are several ways to potentially prevent or a minimum of minimize those tax obligations, so that'' s what we ' ll speak about in the following number of mins right here, however first, it ' s important to recognize that there could not be an excellent remedy for you as points get even more intricate or you start to seek these kind of also great to be real techniques, you may be establishing yourself up for problem, so do what you can to manage your tax obligations, yet eventually, it might just be a great problem to have, one possible remedy is if you have an income that'' s low enough for the year, you could not owe any taxes, that could take place if you only work for part of the year, for example, perhaps you are retiring or going to college or something occurs like that.For example, you ' ve obtained as a single person, allow ' s say 13000 or two, have typical reduction if your revenue is low sufficient, and also let'' s say you secure 8000 from a pre tax account, that would all be consisted of in your income, 5000 of revenues from job plus 8000 right here obtains you approximately 13000, but your taxed earnings would be zero, you will see though that there'' s a various other tax here of 800, that'' s because he or she is under the age of 59 and also fifty percent, so they still owe that 10% charge tax for early distributions. Nevertheless, if they can certify for an exemption or if you'' re over the age of 59.5, that would not apply and your complete tax could be no, you can even obtain tactical about this, so if you recognize that you'' re mosting likely to have a low earnings right here next year, you may wait to take a distribution, maybe it'' s November or December when you realize you want some money, and also if you can wait until January of the following year, that'' s great.Or possibly you divided circulations as well as take several of what you need in December and take the remainder in January, which may help you remain in low tax obligation brackets, or perhaps a 0% tax obligation bracket, Roth circulations are an additional possible method to obtain cash out free of tax, so you already paid income tax obligation on your payments, those need to come out free of tax, yet you require to be mindful of any kind of profits in your Roth accounts. It'' s vital to distinguish in between Roth IRAS and also Roth 401K. So when pulling money out of a Roth IRA, the getting guidelines state that you can take out your normal contributions initially prior to you enter into any type of earnings, however that'' s not the case with Roth 401k. Those Roth distributions appear ad valorem, indicating you'' ll need to consist of some incomes in every distribution, thinking you have any incomes, and also you put on'' t reach draw out one of the most tax preferred dollars initially, whenever you'' re speaking about Roth distributions, you wish to discover out if you'' re making a qualified circulation as well as a qualified distribution normally requires that you'' ve had the account open for 5 years or even more, and you'' re over age 59.5, now, fatality as well as handicap also qualify. And if you'' re relocating cash over to an individual retirement account, things can look various as well, but this is the kind of study you desire to do, discover if you can make a qualified circulation, certainly, the option for making use of Roth might not matter if you'' ve invested your whole life putting in pre tax money, and also naturally, you did have to pay taxes when you make those payments, so once again, absolutely nothing is best below, like I said, you'' ve either paid it one way or another, yet these are means to potentially handle your tax obligations today.Next on the list of not best remedies is a 401K financing, so when you obtain from your 401K, you wear ' t owe taxes on'that withdrawal as long as you pay back the car loan on time, however if you wear'' t pay back, any overdue amount may be dealt with as a distribution which'' s subject to taxes as well as possibly early withdrawal charges, plus with fundings, you truly need to be mindful regarding leaving your task or losing your work, so you could be needed to pay back the superior car loan equilibrium when you quit working for your employer, yet you might not have those funds readily available to just settle a financing in a round figure, that'' s probably why you obtained in the very first place, in some instances, it is possible to balance out the financing amount by adding the cash to an IRA later on, yet those rules can be complicated, and again, you just need a swelling sum of cash to repay the loan, if you'' re mosting likely to do that … What regarding that Obligatory tax withholding? When you take a cash circulation from a 401k, the strategy usually has to withhold 20% of the gross quantity and also send that over to the IRS, as well as that'' s an advance settlement or a down payment on your ultimate tax obligation costs for the year, it'' s not necessarily the exact amount you owe … It'' s simply a down payment. You could owe a lot more, you might owe much less … That'' s bothersome if you need the total that'' s in your 401k, if you can'' t afford to do without that 20%, so as a possible remedy, you might move every one of that cash out of the 401K over to an individual retirement account, an individual retired life account that you regulate and afterwards from there, you can take circulations making use of whatever tax obligation withholding degree you desire, it may be 20%, 10% or absolutely no, once again, bear in mind that you may owe tax obligations on that particular later, as well as not withholding enough might wind up in there being a huge tax expense later in the year and potentially some under payment charges, so there are a number of challenges with that method, and also you also require to be able to take a distribution from your 401k that could not be possible unless you have actually left your job.So it'' s vital to take a look at all these details. By the way, I'' m Justin Pritchard, and also I help people prepare for retirement as well as invest for the future, and also I'' m going to place some resources in the summary below, extra on this subject concerning these tax obligations on 401 withdrawals, individual retirement account withdrawals, I believe you'' ll discover that valuable, there will likewise be some general retirement planning info, simply broad view stuff that I assume will be truly handy, so make certain to examine that out, and also it'' s also a great time to bear in mind, this is simply a short video clip, we'' re not covering whatever right here, it'' s just type of some food for idea, so certainly do some even more research study, three-way check everything and talk to a professional before you make any kind of decisions, so what if your main issue is the fine tax, you'' re under age 59 and fifty percent, as well as you'' re taking a circulation, what are some ways to a minimum of prevent that, also if you need to pay income tax obligations? One remedy may be the so called regulation of 55, this can allow you to obtain money out of a pension without paying the very early withdrawal tax obligation penalty.So you have to leave your work at age 55 or later, as well as if you utilize the cash from that Work ' s, 401K or 403B, Not a different job, however that task that you left at 55 or later on, you can use that cash without the very early withdrawal fine. You still generally owe revenue taxes if it'' s a taxed circulation, that age can go even reduced for public safety employees, there'' s additionally the 72t or substantially equivalent periodic repayments, as an example, that would certainly allow you to take a series of settlements from your pre tax accounts, as well as you can start those before age 59 1/2, getting the cash without the early withdrawal charge, but the approach can be type of inflexible and also difficult, you need to do it for at the very least 5 years, or age 59 and also a half, whichever is much longer, as well as if you make any type of type of little blunder, which is simple, then you could thwart the entire method as well as you would retroactively owe taxes.You have to
be extremely mindful keeping that one, yet it could be a solution. There are likewise 457 strategies out there that wear'' t have an early withdrawal charge, so if you have a governmental 457 B, as an example, you need to have the ability to take withdrawals at any kind of age without a very early circulation penalty. That'' s important to bear in mind, possibly you leave that job in your 30s or 40s or something like that, you might take into consideration leaving the funds in that 457 because after that you have the flexibility to gain access to that money early without the penalty. Preferably. You wait for later on. Often life takes place. That'' s wonderful to have. There are numerous various other exemptions too, so be sure to research those on the internal revenue service internet site or with your tax specialist, and you might obtain some great suggestions, naturally, Captain Obvious would certainly claim, Wait till age 59 and also a fifty percent, which could be possible if you'' re already in your late 50s, possibly you just have a number of years to go. Possibly there are some alternative resources of the funds to choose from, and if you can just make it a couple of years, you have saved that 10%, which can truly make a wonderful difference.Next, we have actually certified charitable distributions or QCDs, so if you are charitably minded, you can offer money straight to a tax professional charity from your individual retirement account, and note that this is from an individual retirement account, not a 401k, so when this is done correctly that contribution is not consisted of in your earnings, despite the fact that you pull the cash out of a pre tax retirement account, so if you ' re going to donate cash anyhow, it ' s truly worth examining this alternative', and that ' s since you ' ll reduce your tax'worry and by skipping the tax repayment, that leaves more cash for your favorite charity in other words, you put on ' t have to take a distribution, pay the'tax obligations on it and afterwards provide the remainder to charity, you can reduce out the middle action and simply send out all of the cash straight to a charity, be certain to review this approach very thoroughly with your tax professional, due to the fact that there are some regulations and constraints to be conscious of specific age limitations as well as optimal quantities, however if you can satisfy every one of those, it ' s a fantastic method, be'sure to have a look at my various other video clips on tax obligations as well as retirement accounts.And if you discovered this practical, please leave a quick thumbs up. Thank you and take care.
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Retire With $50k per Year: Single Example
Harvey 0 Comments Planning your Retirement Retire Wealthy & Wise Retiree Tips and Tricks
They'' re making specific presumptions about just how much your earnings grew over time, however you can upgrade that and also you can say, You recognize what, in this year I didn'' t job for a couple of years, and then in that year, I had a really good year of earnings.Ultimately you can make this personalized, closer to your reality, allow'' s presume you ' re going to get this 23000 or so, and also we increase that by 12 months, so your total revenue for the year is around 28000, if that'' s the case, the amount you ' re going to require to withdraw up per year is around 22000. Once again, none of this guarantees that everything will work completely, however this is a means to what your numbers might look like, it might additionally be wise to triple check those numbers with a monetary expert or with other sources, as well as you can even run that by with a rule of thumb.So if you '
re familiar with the 4% policy, which is a poor name for it, because it'' s not a policy it ' s a research study searching for and nobody actually follows it flawlessly, yet we can say based on that, is it reasonable to anticipate that you could take withdrawals over 30 years? You ' ve obtained a revenue of 50000, it comes from Social Security and also withdrawals, let ' s simply think that all of that money is in a pre tax retired life account, so you sanctuary ' t done any type of Roth, and all of that money may add to your taxed earnings.
Read MoreHow To Retire Early Through Property Investing | A Retirement Planning Pension Strategy
Harvey 0 Comments Planning your Retirement
– Impossible is probably the
response most people will have when they see the
thumbnail for this video, but let me show you how, by taking action, you really can retire in
two years by investing in a certain type of property. (upbeat music) Hi, my name's Tony Law from
Your First Four Houses, and I teach people how to build
a small property portfolio that generates a great income
for them so they can give up their day job if they
wish because they're now financially free. So for 21 years, I ran a kitchen
business where I exchanged my time for money, but
in less than two years, I managed to replace that
kitchen income with a passive, or relatively passive, rental
income, and I want to show you how you can do exactly the same. So for this exercise, I'm not
gonna assume that you need 10,000 pounds a month to
retire and live comfortably. In fact, depending on
where you live in the U.K., the average household
incomes seems to be somewhere between 28 to 35,000 pounds
a year, although personally, I might struggle to live on
that if I'm being really honest, so let's just round that
up to 42,000 pounds a with an IRA for investment year which quite conveniently
helps me with the maths because it means that's 3,500
pounds a month that you need as a passive rental income. Now, for some that may seem
a little on the low side, but I think most people
could probably retire and live quite well on that
if they're being really honest if you had no other bills to pay. So we now have a clear goal. We need to earn 3,500
pounds a month passively moving forward, so let's
just break this down. How many rental units does
that actually equate to? Well, it obviously depends
on the type of deals that you're doing and the
strategy that you're following. In fact, to be honest, I've
got a property that by itself, one single property, after
all bills have been taken off, would cover that amount of
money, although for transparency, I've also got other properties
that only cashflow a couple of hundred pounds a month give or take, and it always surprises me,
there are people out there that have got properties
that simply don't cashflow at all, I just don't understand
that, but let's just say, for the sake of this
exercise, that on average, my property portfolio cashflows
about 500 pounds a month after all bills, so if you
wanted to hit 3,500 pounds a month, how many properties do you need? Well it's seven, isn't
it, nice and simple. It's seven at 500 pounds a
month, but can you acquire seven properties in two years? Yes, I know you can. Maybe in year number one
you might do two or three which will leave you maybe
four or five in year number two as your experience and
confidence grows, but I know that you can do it. Is it gonna be easy? No, you're gonna have to
put in some massive effort to hit this target. You're gonna have to
take a tonne of action, but I know that you can do
it, and if you want a list of 15 tasks that you can
do in the next seven days, check out this video because
I'll run you through exactly what you need to do in
order to hit that target. You see, the thing about
property investing that is quite magical, quite amazing
actually, is that you need to work really, really
hard for a couple of years, and if you do, you can replace
your income in its entirety after just maybe a
couple of years of work, and if I can in some way
help you in your journey, well that would make me very happy. I recently updated my 50 point
checklist that will run you through all the tasks you need to take before buying that next
investment property. If you'd like a copy, simply
click on the link here or in the description box
below and I'll send it straight out to you.
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Read MoreFactors That Can Reduce Retirement Income
Harvey 0 Comments Planning your Retirement
There are many different factors that can reduce retirement income. The first may be fairly obvious, but it's the effect of death. For two spouses when there's a pension involved, the death of a spouse could mean the loss of a pension income. Now if there's a survivor benefit, that income may continue, so it's important to evaluate your options when making pension decisions. A lot of people use insurance to protect against this type of income loss. Another way death can reduce retirement income has to do with Social Security. When two spouses are receiving Social Security and one spouse passes there will be a loss of one of the benefits. Now, the surviving spouse will receive the higher of the two benefits, but there still will be some loss of income. The final way that death can reduce retirement income has to do with taxes. Moving from married filing jointly to now filing single can push the survivor into a higher income tax brackets. The reason for this is that the income thresholds for married filers is about twice what it is for single filers. This can have a major impact on the surviving spouse's net after tax income in retirement.
Taxes in general is another area that a lot of people overlook when it comes to retirement income. The reality is that taxes will take much more from you than the market ever can. For instance, going back to 2008 during the Great Recession, the average portfolio might have declined 20 to 30 percent, assuming it was well diversified, of course. That might have taken a couple of years to recover, but taxes in retirement can easily cost anywhere from 30 to 40 percent. And that's money that will never come back. So it's really important to consider where your different sources of income are coming from in retirement. Would it all come from pensions, Social Security, IRAs, 401(k)s, sources that will be taxed at ordinary income rates? Or do you have good tax diversification where you can choose from pulling money from maybe a Roth IRA raise or non-qualified accounts and really get a lot of control over your taxes in retirement? And finally, inflation. Inflation is absolutely something that can reduce your income in retirement. And it does this by reducing the purchasing power of your dollar in retirement.
Inflation isn't just something that happened in the past – things will continue to cost more in the future. So let's look back 30 years. 30 years is about the average timeframe for most people in retirement. So in 1989, the average cost of a first class postage stamp was twenty five cents. Today that same stamp will cost you fifty five cents. Also in 1989 the average cost of a new car was $15,000. Today the price of a new car will set you back on average $37,000. So you need to look at how well your different sources of income will keep up with inflation during retirement. For help optimizing your retirement income, visit us at PureFinancial.com. .
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Read More7 Core Elements of Retirement Planning
Harvey 0 Comments Planning your Retirement
Everyone bill Lessman here for money evolution calm in today's video I'm gonna be talking about what I call the seven core elements of retirement planning so if you're somebody that wants to get more serious about the planning that you're doing for retirement then I think you're really going to enjoy this video now if you've watched any of my other videos maybe on my blog or my youtube channel or Facebook page then you probably have already heard me talk a little bit about some of these seven core elements individually what I plan to do in this video is really bring them all together really show how each of these seven core elements are all interrelated and hopefully at the end of this video you're going to have some information to help you make some more well-informed decisions about your own retirement but real quick before I get into the presentation I wanted to draw your attention to a free guide that I put together it's the seven core elements of retirement planning guide and in this I have all of the information or a lot of the information that I'm going to cover here in today's video plus there's some great worksheets that you can complete on your own to really help you get a good start towards putting together some of this planning for yourself so to get access to that guide I'm going to put a link right below this video if you click on that link it'll take you to a page just put your email address in there and we'll go ahead and send you out that guide I'll wait here and I'll see everyone back here as we get into presentation okay so welcome back so if you're starting to do some planning for your retirement whether retirements may be coming up in the next year or two or even if retirements still a few years off into the future you probably realize already that there's a lot of different aspects of your retirement and that's what we're gonna be talking about here so let's take a look at these seven core elements so number one on the list is we need to understand how much your retirement could cost and what we call identify your gap the second thing on the list is we need to know where to save money obviously there's lots of choices there's Roth IRAs there's 401k plans traditional accounts so we need to know where to save the money based on your own personal situation and your own individual tax situation we also need to talk about Social Security obviously that's going to be a big component for many of you watching this video is when to collect Social Security how to coordinate your Social Security benefits with your spouse if you're married so that's very important health care that actually may be what I think is one of the most underestimated or overlooked retirement expenses that's out there and there's a lot of information that you need to understand about health care so we're gonna talk about that a little bit here we also need to look at 401k plans so you might have a 401k you might have a 403b plan at work or some other employer sponsored retirement plans we need to know how to best take advantage of that 401k plan there's a lot of features that a lot of people may not fully be aware of that could be inside your 401k plan so how to take advantage of that is certainly very important we need to create a plan for income so if you've been investing for your lifetime and while you're working you were in what we call the retirement accumulation phase once you go into retirement we need to think differently we need to look at how to plan for withdrawals on your portfolio we need to look at things much much differently for that and then finally the last item on the list is investments choosing the investments that are gonna fit within your individual retirement plans and to help you achieve what your retirement goals are unfortunately this item here that we list as number seven on the list is oftentimes the one that people look at first in fact if you turn on the business channel you look at CNBC or you open up the Wall Street Journal or read pretty much any financial publication if you flip through the pages a lot of the discussion a lot of the advertisements are all pushing you towards certain investments they're talking about returns and the performance of this fund versus that fund they're talk about mutual funds they're talking about annuities exchange-traded funds they may be talking about costs you know in looking at low-cost options and they would have you believe that really this is the most important thing that you need to be thinking about regarding your retirement and certainly the investments are absolutely very very important but we want to look at these investments after we've already addressed these other seven core elements and if we start here with investments a lot of times we can kind of get distracted we can get thrown off course a little bit because we really haven't put into thought here how those investments are gonna fit within your your own individual retirement plan but once we've addressed those seven core elements and we start choosing investments now we have a clear vision for what we need those investments to do and what we want them to do to create your plan for income and to create the retirement lifestyle that you want so we're gonna get into each one of these here in a little bit more detail and I'm gonna again start to show you how each one of these seven core elements are gonna be interrelated with one another okay so let's start right here in the middle what we want to do here with this very first core element is we want to try to understand how much your retirement is going to cost or could cost and we also want to identify how much of a gap you have between where you want to be for those retirement goals versus where you are today and what I like to refer to here what I like to think about is begin with the end in mind so here's your retirement and what I want you to do is start thinking about what it is that you think your retirement is going to look like for example what will your housing situation be do you plan to stay in your current house do you plan to downsize homes do you plan to spend winter someplace warm you also want to think about the things that you want to do in retirement so you can have a lot of free time you're not gonna have to go to work anymore so think about the hobbies that you plan to do you plan to play golf every day or do you like to travel and start thinking about how much some of those expenses are going to be and you also want to look and see okay so basically what is your current situation how much are you saving for your retirement how much money do you already have saved for retirement and what we want to look at here and I think this is very important that a lot of people may tend to overlook essentially is that we have a trade-off basically we have our lifestyle that we have today versus that lifestyle that we want to have in retirement and if we think about this for a second here if we spend all of our money today we don't save anything for retirement we're gonna have a great lifestyle here today but that retirements not going to look very good contrary to that we could be saving a whole bunch of money for retirement putting away all kinds of money but that may be sacrificing that lifestyle that we have here today so I want you to think about that a little bit in terms of what are you trading off and I think there's a lot of people because they haven't maybe done some of these calculations they could be in a position where they're saving almost too much money for the retirement they're really sacrificing and giving up a lot of things today and there's a couple of different categories of this there's there's things that of course we have our money that we're saving so if we save more money today that's less money that we can have for the future for that retirement but we also have time as well and so what I mean by that is we may be working ourselves putting all kinds of stress on our on our health on our situation by maybe working a whole bunch we're saving a lot of money for retirement but we're really sacrificing that quality of life here today and so be thinking about all of these different aspects not just the financial aspect of how much you're saving but think about that think about like I said your health – and are you taking care of your yourself from a health standpoint as well because by the time we get to this retirement we want to have healthy bodies we want to be able to go out and do those things be able to play golf in and live that retirement lifestyle so again this is at the very center of these seven core elements and everything else is going to be interrelated to what this retirement gap is actually going to be and and how that's going to affect that future retirement lifestyle okay so now that you've hopefully uncovered what this retirement gap is and you've really kind of gotten an idea of what your retirement cash flow is going to be and cash flow is something that we refer to a lot here on some of the videos that we do but really it is the lifeblood of not only your retirement situation but also your current financial situation it's basically money coming in versus money going out and almost everything else on this list here is going to in some way or another affect cash flow the other thing that I want to talk about here before I start getting into each one of these seven core elements and a little bit more detail are taxes now when I created the seven more elements I thought a lot about how to include taxes should that be its own separate element and what I ultimately decided was that taxes are certainly very important and it's a big part of what we do here in terms of some of our planning but what we're going to talk about is we started looking at these seven core elements as we're gonna look at how taxes are going to influence a lot of these different categories here okay so let's start right off the bat and let's talk about where to save money and obviously we have lots of choices we have Roth accounts like Roth IRAs you even have Roth's 401k plans now and you have traditional accounts and and for retirement savings those are probably two of the most primary areas and basically that's a big decision for a lot of us and what we really need to uncover is what is our tax situation likely going to be in the future versus what is that tax situation going to be today and again it goes right back here to this cash flow and understanding what those gaps are and what does our current situation today versus what is that situation going to be in the future so the Roth is going to be favorable if we think we're going to be in a higher tax bracket in retirement than we are today and the traditional account is going to be more favorable if we think we're going to be in a lower tax bracket in the future so we want to look at that the other thing we want to take a look at and I've actually got a entire video on our YouTube channel where I talk about this is investments for retirement in non retirement accounts and I go into a whole huge explanation as to why I think that is really just wasting a lot of money when it comes to to taxes there so again uncovering what those gaps are is going to help us to figure out where should we be saving money what's going to be the most optimal for that future cash flow situation and for our current tax situation let's look over here to Social Security again that's going to be a very big component we could take Social Security benefits as early as age 62 or we could delay Social Security benefits to as late as age 70 and basically there's a lot of decisions to make there again it's going to come back to understanding that cash flow so there's a lot of be out there talking about how to maximize social security benefits there's even some calculators that you might be able to find out on the web what often times is missing from some of those calculators is how that decision as to when to collect Social Security is going to impact that cash flow situation and contrary how that's going to affect your tax situation as well so we need to look at that and there's also gonna be a coordination of benefits that you need to take into consideration if you're married and you have a spouse because you might decide that one of you collects Social Security benefits early to get a little bit of cash flow coming in but maybe the other spouse is going to wait and delay those Social Security benefits whether or not you're going to be working in retirement is also going to impact that and impact the potential taxes that you're going to have on Social Security health care I talked about this here a few moments ago where health care I think is one of the most underestimated expenses in fact according to a recent survey or study by fidelity investments they determined that an average couple retiring this year that 65 years old could expect to spend two hundred and forty five thousand dollars on health care related costs over their retirement lifetime so that is a huge number a quarter of a million dollars just to cover and fund our health care and that does not include by the way any potential nursing home expenses or long-term care expenses so that's a big deal we also need to consider health care for any of you that may be planning to retire before Medicare that starts at age 65 so you need to look at how your maybe employer benefits if you have any that are going to continue into retirement how that's going to come into play or if you have to go out into the exchanges and go out into the Affordable Care Act in fact actually according to the Kaiser Family Foundation they put together some great research on this health care stuff but they actually said that a 64 year old couple could expect to spend about seventeen thousand dollars a year on their health care premiums for a policy that kicks in before Medicare starts and that still leaves them with about a sixty six hundred dollar out-of-pocket expense that they could have in addition to that $17,000 so that is by no means a top-of-the-line gold playing effect that's actually a silver plan kind of in the middle there but you can see if you want to retire prior to age 65 that that can start to get pretty expensive the other thing here too again taxes are going to also influence your health care as well because your Medicare premiums are going to be largely dependent on what your taxable income what that adjustable gross income is for the year so the higher that is the more likely you are to be paying on your Medicare premium so again understanding that cash flow and understanding what that future cash flow is going to help you hopefully make some better decisions regarding healthcare as well your 401k plan is going to be another one of these seven core elements that you're going to want to optimize unfortunately in my opinion I think a lot of 401k plans have really kind of watered down some of their investment options here over the last several years but there's a couple of things that you can still do to hopefully optimize or maximize some of the benefits that you have on your 401k plan so one of those things is you can go all the way up to eighteen thousand dollars a year in contributions if you're under 50 years old and if you're 50 years old or older that number can be as high as twenty four thousand dollars a year and most people probably just understand that these are the limitations of the 401k plan but some 401k plans in fact more and more are offering this feature you may have access to an after-tax savings account within your company sponsored retirement plans and that could allow you to go all the way up to as much as fifty four thousand dollars a year in total retirement account contributions and that's going to be a combination of your contributions plus any employer match that you might be getting can be as high as fifty four thousand dollars so that can allow you to extend even further some of the contributions that you're making inside the 401k the other thing that a lot of 401k plans are offering now is something called a self-directed account and that is an option that you could have inside your 401k plan that could give you access to literally thousands of additional investment options that are not of the main 401k menu so again not every 401k plan is gonna have these features but you want to definitely look into it and see if that's something now your self-directed account that may not be for everybody either because there's going to be a little bit more research and a little bit more due diligence that you're going to have to do on choosing investments but it could be a great option for somebody to get some additional resources in that 401k plan and then the last thing what will the second the last thing we want to talk about here are planning for income and again we talked about this a little bit earlier that you're in a much different stage of life once you start going into retirement and you're gonna start withdrawing or taking money out of some of these investment accounts and something we call the sequence of return starts to become a very important factor so if you think about it like this you know the market obviously is going to go up and down over time and when you are in the retirement accumulation stage of your investing as the market was maybe going through these these these motions as the market was maybe going down you were continuously hopefully making new investments into those accounts as the market was dropping and but the opposite happens though when you go into retirement if we go through a downturn and you're withdrawing money out of those portfolios that's going to have a very negative effect or can potentially have a very negative effect so we definitely need to take that into account but what we need to do before we do that is we need to understand what this cash flow is and understand where those gaps are so once we understand where those holes are in your financial plan and we know that in certain years you need to take a certain amount of money out of your retirement accounts then we can plan for that accordingly and sometimes what we do is we use what we call a bucket strategy and we just usually divide the portfolio into three buckets and we want to have some cash reserves maybe one to two years worth of cash needs in a very liquid very safe bucket so that when you do need to take money out you're not having to withdraw money from volatile investments that could be invested in the stock market you also may want to have kind of this mid-range thing maybe three to four years or three to five years worth of money that's in a my liquid bucket that's still going to be on the more conservative side and maybe some of those investments are going to pay some dividends or some interest to help you refill that that first bucket and then finally over here is your long-term bucket and that's gonna be investments that are gonna hopefully keep up with inflation provide you with some growth that hopefully if you're in retirement for what could be 20 years or maybe 30 years in length that you've got some growth vehicles there but we want to think and break down this down so that you have a plan for income and keep in mind that if you don't have a plan for income the government has one for you it's called the required minimum distribution rules and so you may know that after you turn 70 and a half you need to start taking mandatory distributions every year from your IRA accounts in your 401k plans as part of this RMD so having your own plan is usually going to be better than reverting back to the government's plan and then finally we talked about this earlier the last thing that we want to look at is the investments that we select and again once we've answered all of these other issues we've looked at the six other core elements then actually choosing the investments becomes pretty easy because now we know what investments are gonna fit into our buckets as an example which investments are going to be able to provide that income or those distribution needs which ones are going to be appropriate for your tax situation that are gonna you know help you you know plan for your Social Security your health care and all of that and then we can start looking at different investments that are going to fit into that retirement plan okay so there you have it those are the seven core elements of retirement planning and hopefully you've gotten some great information here out of watching the video here today and hopefully you've gotten a pretty good idea of how these seven core elements are all interrelated to each other and how making a decision about one item such as social security or healthcare or choosing investments why that doesn't necessarily live in a vacuum and how maybe tweaking something over here might have an influence on something over there and so really bringing everything back to cash flow is really very critical so you understand how you know making a change in one category of your retirement planning you know might impact something else so again hopefully you've already downloaded the guide take your time look through some of the information in there we try to be very thorough with some of that we've got again some great worksheets that are gonna help you really get a good start on putting together some of these retirement plans and certainly think about what you want that retirement to look like also – for some of you you may want a little bit more help and of course we do that we offer a comprehensive cash flow based financial plan that can take a look at this and we will address not only your cash flow today but what that cash flow is likely to be in the future based on what you're currently doing and we can also start to look at each one of these seven core elements and look at how each one of those is going to help you achieve those retirement goals and even if retirement still a little bit more often in the future if you've been saving money or maybe you've been putting off some of the planning that you've been doing again this is something that can help put you on a good track towards making you better well informed about getting retirement planning done
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