BRUCE LINGER
CFP ®, CRPC ®, CCFS™
Simplifying retirement
Retirement planning can seem complex and intimidating, which explains why some people delay doing it. However, with the appropriate help from a knowledgeable financial advisor, preparation can be a straightforward process that produces a sound strategy and a sense of security. To simplify your planning, consider pursuing these 10 steps:
Shift your viewpoint. In retirement, you must go from accumulating wealth to providing a lifetime income stream while preserving wealth. If you accept this focus early in the retirement planning process, then you can go from being a great saver to being a great saver with a rational retirement income security plan.
Review your anticipated income needs. Calculate all the necessary expenditures required in retirement, as well as the unnecessary but desirable ones. Be inclusive so that you can gauge the scope of expenditures accurately. This is the most critical step in the process, because it provides the foundation for all other financial planning.
Conduct a comprehensive revenue review. Start by collecting information on any pensions that you may receive. That includes pensions paid by corporations, governments or other organizations. Know the amounts due to you and the methods of payment— and especially at what age you can begin drawing benefits. Do the same thing for other accounts, whether they are savings or defined contribution plans, like an IRA, a 401( k), a SEP or an annuity.
Know your Social Security benefits. Social Security could be an income source in retirement, so it should be included in a revenue review. Because of its complexities, Social Security calls for a level of diligence and understanding beyond that which is required with other revenue sources. The Social Security Administration can provide information on what you’ ve paid into the system and what you can expect to receive. It is important to know what your spouse’ s benefits will be as well. Also, make sure you understand the impact that divorce or remarriage may have on benefits.
Factor in inflation’ s impact. It’ s important to understand the impact that long-term inflation will have on retirement investments. Unfortunately, many people fail to include calculations for inflation in their retirement planning preparations. Even low levels of inflation can erode the buying power of the dollar. For example, 3-percent inflation over a 24-year period will double your income needs. So, you need to create a retirement plan that has the
76 NEW JERSEY COPS ■ JANUARY 2018