RETIREMENT & PLANNING SOLUTIONS TEAM
With the “catch-up” provision, depending on the type of plan you have, you can contribute more than the maximum contribution amount.
ARE YOU ON TRACK?
Now that retirement is within reach, it’s time to make those last-minute checks to ensure that you are prepared to enter retirement with ease. First on the list is to ensure you have enough money saved away to retire when you want to and how you want to. You may find that in order to do that, you’ll need to increase savings over the next few years. Confirm that your asset allocation and investments are appropriate for your stage in life. Speak to your Financial Advisor to discuss the various ways to enhance your financial future just before retirement. With our Customized Financial Analysis tool, your Financial Advisor is equipped to help guide you into and through retirement.
FILE FOR SOCIAL SECURITY AND MEDICARE
Entering your 60s is a great milestone that comes with the benefit of receiving Social Security. The earliest age you can start receiving your Retirement Social Security benefits is 60. Speak with your Financial Advisor regarding the right benefit strategy for you in light of the changes introduced in the Bipartisan Budget Bill of 2015. With these reforms to Social Security filing strategies, now might be a good time to update your Customized Financial Analysis. If you have never had a Customized Financial Analysis created for you, don’t delay any longer! And don’t forget to sign up for Medicare at age 65. Even if you have other health insurance, you need to sign up for Medicare Part A once you are approaching age 65.
UPDATE YOUR INCOME PLAN AND BUDGET
With retirement knocking on your door, it is important that you reevaluate your goals as they relate to your retirement spending budget and income plan. Meet with your Financial Advisor to go over the sources of retirement income you will have access to, your monthly retirement expenses and any other life events. It is important that you are prepared for any risk that may arise in your retirement, so in addition to ensuring you have a realistic income plan and budget, make sure your emergency fund equals at least 3 to 6 times your monthly expenses.
REEVALUATE YOUR ASSET ALLOCATION
In addition to establishing a realistic retirement income plan and budget, it is important that you look at the investment strategy being implemented in your retirement savings plans. As you get closer to retirement, you want to have a more conservative portfolio. Conservative does not necessarily mean only fixed income assets (such as bonds and Treasury notes) but may also include equity investments (as they may be key components in your portfolio to help grow your savings throughout retirement). Talk with your Financial Advisor as you approach retirement to figure out which investment approach best fits your situation.
Last but not least, if you have disposable income, it is a good idea to take advantage of the extra “catch up” contributions to your 401(k) and Individual Retirement Accounts. With the “catch up” provision, depending on the type of plan you have, you can contribute more than the maximum contribution amount. This is just another way to enhance your finances during retirement.
PLAN FOR HEALTHCARE
Keeping pace with inflation while in retirement is one of the biggest hurdles retirees face. Healthcare presents a unique challenge as healthcare costs typically rise around 5% to 7% a year, while the annual Social Security cost-of-living adjustment is typically only around 2% or 3% a year.Footnote 1 This gap adds up over time and increases the importance of being as realistic as possible in planning for the single largest expense many retirees will face. Healthcare accounts for nearly one-third of spending for Americans age 60 and older.Footnote 2 And while retirees with multiple health conditions will likely spend more monthly and annually on their healthcare expenses, their healthier counterparts can expect to pay more over their lifetime due to simply living longer. Defining realistic expectations of your healthcare costs and longevity within your financial plan can help ensure your other goals are not at risk.
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