No matter where you are in your retirement journey, a financial advisor may be able to provide you with potentially valuable information and advice. A comprehensive retirement plan tailored specifically to your situation could have a major impact on your retirement: It may help you avoid common retirement pitfalls and mitigate risks. Here are 3 potential retirement challenges you can plan for.
While a longer life is certainly a blessing, with it comes the risk of outliving your money. Considering the often expensive healthcare costs in old age, the staggering cost of long-term care and the fact that Americans continue to live longer, running out of savings in retirement is certainly a possibility. However, there are options for protecting against this. While Social Security can provide reliable lifetime income, it’s only designed to replace about 40% of your pre-retirement income, and may replace less depending on your lifestyle. We can help you decide on the best retirement income option for you, whether you have a pension and are unsure of your payout strategy, or you’re wondering how to turn your retirement account savings into lifetime income.
Current and Future Taxes
A change in leadership in Washington and a growing national debt could potentially mean higher taxes in the future. Starting at age 72, IRAs, 401(k)s, 403(b), 457, and Thrift Savings plans are subject to Required Minimum Distributions (RMDs). The purpose is to draw down your account and tax the funds that have been growing tax-deferred for many years. RMDs are one reason why your tax burden could increase in retirement. There are many strategies available, including a Roth IRA conversion, in which you pay tax on contributions instead of distributions. Roth IRAs are also not subject to RMDs and can be used in addition to a traditional IRA or 401(k) to help minimize taxes.
Low Interest Rates
Low interest rates can be great for people buying a home or taking out student loans, but what about those nearing or in retirement? When lower-risk investments like CDs and bonds offer lower returns, it can make retirement planning more complicated. Interest rates are almost zero, and they could stay low for at least a few years. While this may help an economy struggling with the COVID-19 pandemic, it may tell a more complicated story for retirees. An advisor can help you assess your investment options and create a plan aimed at getting you a reasonable rate of return.
An advisor can look at how these retirement challenges could affect you, and help you develop a plan that is tailored to meet your unique needs. We’re also here to help you adapt this plan in the case of financial and life changes, as well as policy changes. Our complimentary financial review is the first step to creating a comprehensive retirement plan and a strong relationship with an advisor that could last your lifetime – get in touch to sign up.
Epstein & White Financial, LLC (“Epstein & White Financial”) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. A copy of Epstein & White Financial’s current written disclosure statement discussing our advisory services and fees is available for review upon request or at www.adviserinfo.sec.gov.
Epstein & White Retirement Income Solutions, LLC (“Epstein & White Retirement”) is a licensed insurance agency with the State of California Department of Insurance (#0K53785). All investment advisory and financial planning services are provided only through Epstein & White Financial.
Information contained herein is for informational and illustrative purposes only and general in nature. It should not be considered investment advice or a recommendation to buy or sell any type of securities or insurance products and no investment decision should be made based solely on any information provided herein. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas.
Investment in securities carries a risk of loss, including loss of principal amount invested. Different types of investments involve varying degrees of risk. It should not be assumed that diversification or asset allocation protects a portfolio from loss or that such will produce profitable results.