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Consider multiple factors when creating retirement plans

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Rocky Speight

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BY ROCKY SPEIGHT
Business Columnist

Monday, October 9, 2017

When you create your financial and investment strategies for retirement, what will you need to know?

Consider the following:

■ Age at retirement: Your retirement date likely will be heavily influenced by your financial situation – so, if you have to keep working, that’s what you’ll do. But if you have a choice in the matter, your decision could have a big impact on your investment strategy. For example, if you want to retire early, you may need to save and invest more aggressively than you would if you plan to work well past typical retirement age. Also, your retirement date may well affect when you start accepting Social Security payments; if you retire early, you might have to start taking your benefits at age 62, even though your monthly checks will be considerably smaller than if you waited until your “full” retirement age, which is likely to be 66 or 67.

■ Retirement lifestyle: Some people want to spend their retirement years traveling, while others simply want to stay close to home and family. The lifestyle you choose will affect how much you need to accumulate before you retire and how much you will need to withdraw from your various investment accounts once you do.

■ Second career: Some people retire from one career only to begin another. If you launch a new career, it could clearly affect your financial picture. For one thing, you might be able to withdraw less from your retirement accounts each year. (Keep in mind, though, that once you reach 70 ½, you will have to take at least some withdrawals from your traditional IRA and your 401(k). On the other hand, if you keep earning income, you can continue putting money into a traditional IRA (until you’re 70½) or a Roth IRA (indefinitely) and possibly contribute to a retirement plan for the self-employed.

■ Philanthropy: During your working years, you may have consistently donated money to charitable organizations. Once you retire, you may want to do even more. You might want to work with your legal advisor and financial professional to incorporate elements of your investment portfolio into your estate plans to provide more support for charitable groups.

As you can see, your retirement goals can affect your investment strategy — and vice versa. So, think carefully about what you want to accomplish, plan ahead and get the help you need. It takes time and effort to achieve a successful retirement, but it’s worth it.

Rocky Speight is a financial adviser for Edward Jones in Rocky Mount.

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