Retirement Planning

Retirement planning is one of the most commonly sought forms of financial planning today and often the number one goal for investors. However, statistics show that many Americans either haven’t saved enough for retirement and an alarming rate aren’t even aware of how much they actually have saved towards retirement. In addition to these factors many investors who haven’t planned aren’t aware of how much they need to save in order to fund their specific retirement goals and needs.

Basics of Retirement Planning

Retirement Planning consists of two distinct phases: the accumulation phase and the withdrawal (or distribution) phase. Most of our experience is spent preparing for retirement by saving in company retirement plans or qualified retirement accounts during the accumulation phase. During this phase it can be determined if the proper amount is being saved towards your vision of retirement and that these savings are being properly allocated to withstand market changes. Furthermore, Retirement Planning is a continual process that allows our investors to partner with Coastal Wealth Planners to adapt for life events, risk appetite changes, the shortening timeline to retirement and additional concerns that present themselves as retirement nears. It is also an opportunity to begin to visualize what types of accounts or investments are being use to fund the future retirement goals for maximum withdrawal and tax efficiency during your retirement years.   

 As we approach your retirement date we will continue to lay the framework for supporting your needs and goals for the remainder of your years. The preparation for this phase will involve collecting and/or updating all retirement income sources such as social security income, pension income, rental income, income from trusts or any other income sources. In combination with these defined income sources we will be able to assist with supplementing the income gap to cover your other expenses while factoring in such things as market returns, inflation, required minimum distributions and medical costs in retirement. Planning for the distribution phase of retirement is the equivalent of having a plan not only to climb the mountain (accumulation) but to return back down safely as well.

Understanding Tax Implications

Retirement planning can often seem easier than the actual task at hand. First, the investor needs to understand the tax impacts of the sources that are funding the retirement goals they have set forth. As an example, Traditional IRA or 401k withdrawals are tax-deferred savings meaning that they will be viewed as, and added to ordinary income for the tax year that they are distributed from the account. Therefore, in order to raise the applicable amount of funds to close an income gap an investor has to factor in taxes in most cases and/or combine multiple sources of withdrawals for maximum tax efficiency. Although this may not seem too difficult when taken at face value, planning needs to involve inflation of expenses at their applicable inflation rates – making the budget somewhat of a moving target. In addition to these factors, the tax impact and potential amount of Required Minimum Distributions (also known as RMDs) that must be taken after the age of 70 ½ should be factored into the plan as well. Here at Coastal Wealth Planners we are capable of incorporating all of these variables into your individualized plan.

The “What Ifs” of Retirement

It is extremely common to have many questions about an unknown future, most importantly don’t feel that you are alone in those feelings. Often times these questions will be presented as “What if…..” and that is where we can address some of these scenarios as part of your plan. From volatile market conditions, social security or pension cuts, longevity of a single spouse, retiring earlier or later than planned, semi-retirement, long term care or medical needs in retirement and many others we are here to help illustrate the potential impacts of these on your specific plan here at Coastal Wealth Planners.

To explore some of these planning topics click HERE to register for our free planning tool.

For more information, or to schedule a complimentary Retirement Planning Introduction call us at 732-554-1099 or feel free to schedule time HERE. To download our FREE 5 Steps to Early Retirement Guide click here:

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