Three Actions To Take Before You Retire

August 11, 2018

 

 

 

Most of us have heard the old adage attributed to Benjamin Franklin, “If you fail to plan, you are planning to fail.” When it comes to your retirement, you definitely do not want to fail. You have worked hard your whole life and don’t want to leave your golden years to chance, taking the risk of running out of money or having a lower quality of living than you desire. To set yourself up for a retirement that meets your expectations, take these three actions before you reach this life milestone.

 

1. Create A Social Security Strategy

Social Security benefits can be claimed anytime between ages 62 and 70. However, the timing of when you decide to collect these benefits will impact the amount of payout you receive. At 62, you become eligible to receive social security benefits for the first time. But before you start claiming social security, it’s important to review your benefits and options for claiming so that you can plan to maximize your lifetime benefit.

 

If you start claiming benefits at age 62, your benefits are about 26% lower than if you waited for full retirement age, and over 40% less than if you wait until you are 70 to claim. It’s also important to consider how long you’ve worked and your lifetime average monthly earnings, which are used to calculate your benefit. In some cases, working a few extra years can have a big impact on your monthly social security benefit.


Finally, you’ll want to review your spousal benefits and spousal claiming strategies, especially if you are widowed or divorced. It may be beneficial to start claiming spousal benefits now and delay claiming your own benefits until later.

 

Social security is complicated, so it’s important to work with a financial professional that understands the options available and can help you determine the best strategy for you.

 

2. Create A Withdrawal Strategy

Just because you’ve worked hard to save for retirement and build up a nest egg doesn’t mean you can rest easy. Once you start tapping into your savings, you need to develop a strategy to withdraw your funds so they last the rest of your life, however long that may be.

 

Since you know that stocks have historically earned an average of 8% a year, you might assume that you can afford to withdraw 8% of the initial portfolio value (plus a little more for inflation each year). But in reality, to protect against the uncertainty of the market, you may have to limit your withdrawals to 4% or less. Since there is no simple, one-size-fits-all plan, you need to figure out what will work for you and your unique situation, taking various factors into account, such as time horizon, risk tolerance, asset allocation, and unexpected living expenses.

 

3. Pay Off Debt

The less debt you have when you enter retirement, the better. Reducing your consumer debt before retiring helps you lower your monthly expenses and enables your savings to grow and last longer.

 

Review all current debts you face and compare interest rates and balances. This can help you decide which to pay off first. Once you’ve eliminated credit card and auto debt, see how you can aggressively pay off your mortgage. Being mortgage-free could reduce your monthly expenses by up to a third and make a significant impact on how you spend your savings.

 

Are You Ready To Get Started?

Regardless of whether you’re 5 or 10 years away from retirement, you will benefit from creating an action plan to meet your retirement goals. If you would more information about creating a Social Security claiming strategy, deciding on your withdrawal rate, or paying off debt, download your free retirement readiness kit and contact us today for your free 60 minute discovery consultation.

 

About John

John is the founder and owner of Beacon Wealth Management. He specializes in helping entrepreneurs, professional practitioners and retiree redzoners overcome the major financial challenges facing affluent families.  

 

As a trusted and friendly financial partner, John delivers a collaborative client experience that empowers and guides people to reach a greater purpose for their wealth and pursue their financial dreams. He understands the multifaceted set of financial worries people face as they become more successful and get within the retirement redzone.    

 

John is well-regarded throughout the business community for his expertise. He has appeared as an expert guest on the “Brian Tracy Show” and “Hollywood live with Jack Canfield”, is the co-author of the book, Masters of Success with Brian Tracy, is the host of the WDTV News 5 segment, “Solutions 4 Financial Independence,” and has conducted hundreds of educational events on Retirement and Investment Advisory, Tax Reduction and Wealth Transfer Planning.  These include many Universities, Federal Employee Organizations, Professional Associations and Large Energy Companies throughout the eastern United States.

 

With more than two decades of experience, John is credentialed as a Certified Wealth Strategist (CWS), Accredited Investment Fiduciary (AIF), Certified Estate Planner (CEP), Chartered Federal Employee Benefits Consultant (ChFEBC), Professional Plan Consultant (PPC) and Registered Financial Consultant (RFC). He is also a past multi-year member of Ed Slott’s Master Elite IRA Study Group.   

 

A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a Wealth Advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he is passionate about giving back to his community, coaching youth sports, landscaping, architectural design and playing racquetball.

 

 

 

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Securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Beacon Wealth Management operates independently of Cambridge. This communication is strictly intended for individuals residing in the states of DC, DE, FL, MD, NC, OH, PA, SC, TN, TX, VA, and WV. No offers may be made or accepted from any resident outside the specific state(s) referenced.

 

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