Retirement: the word itself has a cloud of mystery around it. Many of us go through our lives worrying about how to pay rent, car loans, or mortgages, let alone putting money aside for retirement. The phase of life seems to be for your parents or friends’ parents, not for those who are still planning on which career to pursue or are saving for a wedding or vacation. However, the more you know and the earlier you start planning for retirement, the more secure your financial future will be and the thinner the cloud of mystery will be. With the expertise of the financial advisors at Aureus Wealth Management, you can be confident that you will have a happy and secure retirement.
Why is Retirement Planning Important?
What is Your Life Expectancy?
Many Americans live to their 80s and beyond. With the retirement age between 65 and 67, depending on when you were born, that could be 15 plus years when you don’t have an income from an employer and you will need to rely on Social Security, 401(k) plans, IRAs, or other sources of income. While having a long life is a good thing, it also brings along the stress of having to fund an unknowable number of years. Retirement planning is more than just putting money aside for when you are no longer working, it also means planning on having enough resources to last for longer than you may expect and any unforeseeable medical expenses.
There are a vast number of people who will require long-term care after retirement. While Medicare covers some of the home health care or nursing facility costs and there are long-term insurance options, there still needs to be backup funds. Growing costs for assisted living facilities and medical bills can be a significant amount each month, possibly leaving your family to foot the bill. When you include long-term care savings in your retirement plan, you can help ease the burden.
Perhaps the most confusing and overwhelming aspect of retirement planning, taxes on your savings accounts are inevitable. 401(k) plans, IRA, Roth IRA, and Social Security all have varying tax requirements. Whether the plans are pre-tax or if the money is taxed upon withdrawal, it’s crucial to know just how the plans work and how it fits into your retirement strategy. When beginning the retirement planning process, you can account for the amount of money that will be lost due to taxes.
Enjoy Your Retirement Years
Above all, you want to be able to enjoy your non-working years. After 40 plus years of working and saving hard, it’s time to rest. It’s finally time for you to take that vacation of your dreams, start that project you’ve always wanted to work on or enjoy some extra time with your family. To have peace of mind so you can fully relax during retirement, it’s important to have a solid financial plan.
You may not be thinking about it just yet, but keep in mind that the earlier you start saving, the bigger the payoff will be in the end. As little fun and challenging as saving money can be, in order to have a secure retirement, having a financial strategy is an important step. Contact a financial advisor today to learn more about planning for retirement.