Financial Focus | December 15, 2016

Here’s your retirement “to do” list

At this time of year, your life is probably more hectic than usual – so you may have assembled an impressive “to do” list. This can be a helpful tool for organizing your activities in the near future – but have you ever thought of developing a “to do” list for longterm goals, such as a comfortable retirement? If not, you may want to think about it – and here are a few list-worthy items to consider:

 

Examine – and re-examine – your planned retirement age. You may have long counted on retiring at a certain age, but are you sure that this goal is the best one for your overall financial situation? Think about it: If you like your job, and you stayed at it for just a few more years, you could significantly boost the funds in your 401(k) or other retirement plan, and you might even be able to delay taking Social Security, which, in turn, would result in larger monthly payments.

 

Put a “price tag” on your retirement lifestyle. When you retire, do you want to travel the world or stay at home pursuing your hobbies? Will you truly retire from all types of work, or will you do some consulting or take up part-time employment? Once you know what your retirement lifestyle might look like, you can better estimate your costs and expenses – and this knowledge will help you determine how much you need to withdraw each year from your various retirement accounts, such as your IRA, 401(k) or other employer-based plan.

 

Be aware of retirement plan withdrawal rules. It isn’t enough just to recognize how much you need to withdraw from your retirement plans – you also must know how much you must withdraw. Once you turn 70 ½, you generally have to start taking money out of your traditional IRA and 401(k). These required minimum distributions, or RMDs, are based on your account balance, age and other factors, but the key word to remember is “required” – if you don’t withdraw the full amount of the RMD by the applicable deadline, the amount not withdrawn can be taxed at a 50% rate.

 

Review your health care situation…

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