Now Is the Time to Review Your Investments
In conducting research for our upcoming book, the Senior & Boomer’s Guide to Health Care Reform & Avoiding Nursing Home Poverty we learned that many people who are still working are giving retirement a second thought.
This is because they have to make big decisions about things such as Social Security and taxes - in advance. The world as we knew it has been turned upside-down in recent years, and this decision will affect the rest of your life. Many are not sure they are ready - emotionally and financially - to retire.
If you're considering making the break, ask yourself these questions:
AM I REALLY READY?
Because of the loss of our financial security-blankets in recent years, people are working longer. If you enjoy your job, maybe you should keep working.
Working will allow you more time to build up your savings for the day when you really do want to play golf instead of office politics, and more time to pay down your mortgage. Keep in mind, once you retire, it can be difficult to un-retire.
CAN I REALLY LIVE ON A SMALLER BUDGET?
If you think it was hard staying on a budget during your working life, you ain't seen nuthin' yet! In fact, it often gets more expensive to live after you retire. You've got less coming in. But you'll probably be spending money on things you never had the time to spend it on before.
You'll probably be traveling more. Seeing more movies or ballgames. Playing more golf. Going out with friends more. And perhaps buying more "toys."
The Web can be a resource. Retirement and financial planning websites like Mint.com can help you figure out expenses that may end with retirement, and those that may begin.
Some experts encourage a trial run, by living on a projected "retirement budget" while you're still working. It's not a totally accurate method. But it might give you time to develop coping strategies.
CAN I PUT OFF TAKING SOCIAL SECURITY?
There's a natural instinct to sign up when you turn 62. But "full-retirement age" isn't until 66...and, if you start early, your benefits will be reduced. So, if you've got a bit of a nest egg, consider waiting a while. And if you can wait until 70, your benefits will be even higher.
For those eligible at age 66, waiting just one year will result in monthly benefits equaling 108% of the previous amount. And waiting until 70 would generate 132% of the regular monthly benefit! In fact, you can nearly double the amount you'll get at 62 if you can wait until 70.
HAVE YOU SPOKEN WITH YOUR ACCOUNTANT?
Most of us speak with our accountant just once a year - at tax time. But don't consider retirement without discussing your finances with your accountant or asking us about how we can help you with retirement and tax planning.
Consider a financial planner, too. A big chunk of your IRA is going to Uncle Sam when you withdraw it. Together, we can help you develop a strategy for your taxable and tax-sheltered accounts. And we can help you decide whether to convert to a Roth IRA, where withdrawals are tax-free, but conversions are not.
ARE YOUR INVESTMENTS SAFE AND PRODUCTIVE?
Many people especially those considering retirement or in retirement should review their portfolio with an eye towards age and risk tolerance, making sure they are in line with one and other. Many people are sick of banks not only dropping their CD rates but their money market rates as well. Many professionals are concerned that interest rates may be at a turning point and with the debt ceiling conversation being revisited, now may be a good time to review your investment options. If you would like some information on safe investing for seniors, please let us know.
At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones. We provide clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.
We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your family and legacy.