Retirement Planning Basics: What We Believe are the Most Important Aspects of a Retirement Plan
We Suggest not Neglecting These Planning Considerations for Your Financial Future
At Paces Ferry, we believe retirement planning is an essential part of financial planning for anyone who wants to help ensure a comfortable life after they stop working. Many people, however, put off planning for their retirement, believing that they have plenty of time to do so – or procrastinating because they aren’t sure how to start. Unfortunately, this procrastination can be costly and leave you with a retirement that is less than ideal. In this article, we will discuss our retirement planning basics and the most important aspects of any retirement planning strategy.
Retirement Planning Basics
Retirement planning is the process of determining how much money you will need to live on after you stop working and putting in place the strategies to achieve that goal. Our first step in retirement planning is to determine how much money you will need in retirement. This will depend on factors such as your lifestyle, health, and anticipated expenses.
Our next step is to identify your sources of retirement income. This may include Social Security, pensions, investments, and personal savings. We believe it is important to understand how each of these sources will contribute to your retirement income and to make adjustments as necessary to ensure that you will have enough money to support yourself in retirement.
Our final step is to develop a plan for managing your retirement income. This may involve creating a budget, investing your savings, and considering strategies such as annuities or other forms of guaranteed income.
What We Believe are the Most Important Aspects of a Retirement Plan
While every retirement plan will be different depending on an individual’s circumstances, there are critical retirement planning basics we believe should be included in any plan. These include:
Retirement Planning Basics: Target Retirement Age
Knowing when you want to retire should help you plan your savings and investment strategies to meet your retirement income goals. It’s important to keep in mind that retiring earlier may reduce the amount of Social Security benefits you receive and increase the length of time you need to rely on your own savings. On the other hand, retiring later can increase your Social Security benefits and reduce the amount of time you need to rely fully on your own savings.
Retirement Planning Basics: Target Retirement Income
We believe another of the most critical retirement planning basics is knowing how much money you will need in retirement. This should help you plan your savings and investment strategies to meet your retirement income goals. We believe it is important to consider factors such as inflation, taxes, and potential healthcare costs when estimating your retirement expenses and determining your target retirement income.
Retirement Planning Basics: Savings Plan
We believe saving for retirement should start as early as possible. The longer you have to save, the more time your money should have to grow. Of course, we believe it’s never too late to begin a proper savings strategy, so don’t despair if you think you’ve waited too long. At any age, it’s important to develop a savings plan that takes into account your retirement income goals and your current financial situation. We believe this plan should include setting aside a portion of your income each month for retirement, maximizing contributions to tax-advantaged retirement accounts, and regularly reviewing and adjusting your savings plan as needed.
Retirement Planning Basics: Investment Strategies
Investing your savings should be an essential part of retirement planning. There are many different investment options available, and it is important to choose investments that match your risk tolerance and investment goals. A well-diversified investment portfolio that includes a mix of stocks, bonds, and other assets should help balance risk and reward, and working with a financial advisor can provide guidance on selecting and managing investments.
Retirement Planning Basics: Social Security
Social Security is an important source of retirement income for many people. Understanding how Social Security works and how it will contribute to your retirement income should be an important part of retirement planning. Factors such as your age, income history, and retirement age can impact the amount of Social Security benefits you receive, and it’s important to consider these factors when planning for retirement. In addition, it’s important to know when you’re eligible to begin receiving benefits and to understand how taking benefits early – or delaying them – can impact your retirement income.
Would You Like a Professional Partner in Planning for Your Future?
We believe retirement planning is an essential part of financial planning for anyone who wants to help ensure a comfortable life after they stop working. We believe your retirement planning basics should include those mentioned above, as well as important aspects like healthcare planning and estate planning.
All of this planning can feel a bit overwhelming when you’re doing it on your own, but working alongside a financial advisor you trust may help you accomplish retirement planning basics and much more. If you’d like to speak with an experienced financial advisor in the Atlanta area, please contact the Paces Ferry team today.
Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.