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You might be thinking about retiring, but how do you know when you are really ready for it mentally and financially? For decades, the common retirement age was 65. This is also the same age you become eligible for Social Security and Medicare. But things are different today. Answer these five questions to find out how, when, and if you should retire:
Married couples don’t always plot retirement on the same timeline. According to a recent study by Fidelity, 43% of couples disagree about what age they plan on retiring. For other folks, circumstances like an unexpected job loss or health issue push spouses onto separate retirement schedules. This also commonly occurs when there is an age difference between spouses.
When one spouse retires and the other keeps working, it's important that the couple understands the effects on their finances, their schedules, and their long-term goals. Here are three important conversations that couples should have about syncing two retirements to a shared Life-Centered financial plan.
Many new retirees feel lost without their jobs. But often what these struggling folks are really missing is the sense of purpose that their careers gave them. Even if you didn't love everything about your job, work gave your days structure and a sense of meaning as you put your skills to good use and provided for yourself and your family. That's why our Life-Centered Planning process puts such a strong emphasis on preparing you for the transition away from work and into a new phase of life where purpose itself can be redefined, and even deepened.
Answering these two questions could help you find that purpose and keep getting the best life possible with the money you have in retirement.
Under normal circumstances, new retirees often spend weeks, months, or even years taking stock of their lives and reassessing their priorities.
The pandemic, and now the war in Ukraine, have accelerated that process of reflection for many retirees. When the future feels uncertain, we tend to cling to the things that we do feel sure about: our loved ones, our passions, the goals that we want to accomplish.
The good news is that those foundational elements of life are exactly what seniors can build their retirement around. Even if you decide to take a part-time job, you'll have some flexibility to include the people and activities that make your life meaningful in your new retirement routine.
For many, an ideal retirement week mixes smaller, everyday pleasures with progress on long-term goals. You might schedule a couple afternoon lunches or rounds of golf with retired friends around the online classes you're taking to earn your Master's. As you're preparing for that big "bucket list" trip to Europe, you could make a few extra weekend trips to watch your grandkids play baseball.
There's no right or wrong way to orient your retirement around the things that are most important to you, and in many cases the process involves some trial and error. Our life planning tools can help you gain clarity on what really matters. Then, we can filter those things into a draft of your ideal week in Retirement.
Three of the most valuable resources a retiree has are money, energy, and time. Many of our clients have told us that the older they get, the more value they assign to those last two.
Which isn't to downplay the importance of money. You should be proud of all the hard work you put into building your nest egg. Now that you're no longer focused on saving and investing, embrace the possibilities for fun, relaxation, connection, exploration, and purpose that your money provides.
But also think about the causes that could benefit from your generosity, the issues in your community that you could improve with a sustained charitable giving plan, the legacy you could leave by starting your own family foundation.
Then, think about how you can move beyond money. Your favorite local nonprofit might appreciate your gratis marketing or web security skills even more than your monthly support. If you especially enjoyed helping new workers find their feet during your career, you might become a tutor or mentor.
Making strong connections between your resources and what's most meaningful to you will be key to discovering your purpose in retirement. The process isn't always easy, and it rarely follows a straight line. But it can be one of the most rewarding journeys you'll take. We're always available to help you plan for the next step and your ultimate destination.
Roth Individual Retirement Accounts (IRA) are attractive investment accounts because of the tax-free income that they provide with qualified withdrawals. However, many higher-income earners are not eligible to contribute to a Roth IRA.
Fortunately, there is a strategy to navigate around this – often referred to as the "Backdoor Roth IRA". The process involves opening a traditional IRA, making your desired contribution - up to the annual maximum amount, and then later convert the funds to a Roth IRA…
With the new year comes some new changes to retirement plans starting January 1, 2020. Between the Internal Revenue Service announcing cost-of-living adjustments for tax year 2020 and the new Secure Act, there is a lot to digest.
Here are the highlights:
Detailed in Notice 2019-59 and posted on IRS.gov, the IRS is increasing the contribution limits to 401(k) and other retirement plans starting January 1, 2020, including:
