Retirement Planning Converts What-if’s into Should-do’s

As much as we like the predictable, retirement can be a mix of variables and uncertainties including income, assets, expenses, and longevity. Financial advisers often state that more than 90% of aspiring or current retirees lack either a retirement plan or a working knowledge of financial basics including budgeting.

Getting answers to common questions or help from a qualified professional is often the first step in creating a flexible and actionable plan. These can include:

Q: What if I don’t use a plan? Can’t I just draw out my savings and Social Security?
A: You should have a plan built with both facts and assumptions to initially project how long the income and assets may last.

Q: What if I don’t know my expected Social Security, and what might it cover?
A: You should visit www.ssa.gov to access your individualized information. For many, Social Security covers only about 40% of their regular monthly expenses.

Q: What if I’m thinking of taking my Social Security ASAP?
A: You should consider waiting, which can mean an 8% annual increase past full retirement age. Survivor benefits are impacted by starting too soon, and it generally pays to wait if possible.

Q: What if I have a gap between my expenses and all income sources?
A: You should review the ability of your assets to cover the gap, which might mean converting some assets into lifetime income producers, like a fixed index annuity.

Q: What if I’ve built a “nice” 401(k) balance?
A: You should recognize that those are tax-deferred dollars, not tax-free. The account balance can’t all apply to expenses and discretionary items.

Q: What if health issues have often shortened lives in my family?
A: You should still plan for the longer-term as the possible exception. Average life spans now run 88 years for women, and 86 years for men.

When in or considering retirement, getting a firm grip on the basics and engaging an experienced financial professional can help move a mindset from hypothetical to practical.