Wealth Management Blog | WrapManager | Retirement Planning (6)

What’s the Cost of a Successful Retirement?

Posted by Michael J. O'Connor | CWS®, Vice President Investments

February 17, 2016

Discussions about retirement planning usually begin with a basic question: What’s the cost of a successful retirement? If everyone had the same expenses, the same family situation, and the same retirement goals and aspirations, there could be a one-size-fits-all answer to this question. But each person’s situation is unique. That said, there are certainly rules of thumb that can be extremely helpful when it comes to retirement planning. Using general guidelines—with a healthy helping of personalization—you can answer the very important question of how much you will need to have a successful retirement.

Let’s first take a look at general guidelines, and then we’ll look at the ways each person needs to personalize retirement planning to fit their unique situations.

Rules of Thumb

Everyone can begin their retirement calculations from a few basic rules of thumb and then personalize from there. The following guidelines can help you get a rough, generalized estimate of what you’ll need for a successful retirement.

7 Tips to Reduce Taxable Income Through Charitable Giving

December 16, 2015

Charitable giving reached an all-time high in 2014,1 with Americans giving $358.38 billion to charities, according to National Philanthropic Trust.2 Giving feels good, but the benefits of giving don’t end there. You can also reduce your taxable income through charitable giving by making sure you follow the tax guidelines for charitable donations. If you haven’t yet done so, you can join the millions of Americans who donate to charity and receive a reward for themselves: a lower overall tax bill. In order to make a difference in your taxes, follow these 7 guidelines: Choose Qualified Charities. Not all charities qualify for tax deductions. If you’re unsure about a charity’s status, ask to see their letter from the IRS or search online at the IRS Exempt Organization Select Check website. If you’re donating to a church, mosque, synagogue, or temple, keep in mind that religious charities are considered de facto charitable organizations, even if they’re not on the IRS list. [+] Read More

Reduce Taxable Income: Maximize Contributions to Tax-Deferred Accounts

November 25, 2015

Tax bills are on the rise: it now takes the average American until April 24th each year to work enough to pay off his or her share of local, state, and federal taxes, as calculated by the nonpartisan Tax Foundation.1 With proper planning, however, you can reduce your income tax burden by maximizing contributions to tax-deferred accounts. This is a common tax-reducing strategy, but investors often underuse it. [+] Read More

Social Security Changes: How the Budget Agreement Affects Retirement Plans

November 18, 2015

Investor concerns about another government shutdown were eased in late October, when Congressional leaders passed a bipartisan agreement that will provide relief from sequester cuts and avoid unnecessary debt defaults1 (yes, we just wrote the words ‘bipartisan’ and ‘agreement’ in the same sentence). A closer look at the budget agreement, however, revealed some changes to Social Security rules that will close the window – at least for now - on some unique Social Security Retirement Benefit ‘strategies’ that we’ve written about before. The End of the “File and Suspend” Strategy The first is the File and Suspend Strategy. Before this budget agreement, the file and suspend option allowed one person in a married couple to file for their benefit (thereby allowing the spouse to claim their benefit) but then immediately suspend it – allowing that future benefit to increase. You file, your spouse claims, then you suspend. [+] Read More

Small- and Large-Scale Retirement Lifestyle Planning Considerations

October 21, 2015

For many people approaching retirement age, there may be trepidation about how to properly plan for your retirement lifestyle. Unfortunately, without having a trusted advisor along for the ride, the journey toward retirement can feel a lot like planning a trip to the moon without an engineer. There are many unknown aspects about what will happen once you actually retire. How will your new-found freedom affect your spending habits? What will be the state of the economy at that point in time? Will you stay where you are, or travel, or permanently relocate? Hire an Advisor A good first step to successful retirement lifestyle planning is to find a financial advisor that can help to answer questions you have about how your investments can work for you as you approach retirement and beyond. As your employment situation changes, your income will fluctuate and the tax laws regarding your income will also likely change. A knowledgeable advisor will be able to tell you which changes will directly impact you based on your current situation, in conjunction with your CPA, can help formulate a plan to take advantage of the best tax breaks and plan investments accordingly. [+] Read More

Cash Vs. Mortgage in Your Retirement Lifestyle Planning

October 6, 2015

Many people approaching retirement consider where they will live during their retirement years. Relocating to a more affordable or comfortable area could be an important part of your retirement lifestyle planning. Even if you plan to remain in your current home, however, your family nest egg will be influenced by your home financing. Cash vs. Mortgage Different schools of thought exist about whether it’s best to pay off your home and live debt free or carry a mortgage during your retirement years. It seems like a simple decision, but several factors complicate this decision. Further, there isn’t a one-size-fits-all answer to this question. Depending on your personal retirement lifestyle planning goals and your current situation, one of these options will likely be more advantageous than another. Your financial advisor can help you sort out the ramifications of whether to pay off your mortgage, carry a loan, or consider a reverse mortgage. [+] Read More

Your Retirement Planning Strategy: The Key Players

September 29, 2015

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Managing Market Risk with Long-Term Investing

September 23, 2015

After recent financial ups and downs, managing market risk is on investors’ minds. Volatility in the markets can make people nervous, but it’s important to remember that risk is always present when it comes to investing. Even conservative investments like certificates of deposit (CDs) carry the risk of inflation. And yet, investing is a very important component for growing your wealth over time. How much should you worry about managing market risk? What can you do when the market becomes exceptionally volatile? [+] Read More

How the Affordable Care Act May Affect Doctors' Retirement Plans

September 8, 2015

No matter what your political views on the Affordable Care Act, it is at least agreeable that the new law is changing the nature and structure of healthcare in this country – who is eligible (everyone), how it gets paid for, how insurance companies and hospitals negotiate rates, and so on. If you’re a doctor reading this article, then you know first-hand how the new law has changed the way you do business, and you might even be anticipating more changes in the future. Do one or all three of the situations below apply to you? Quality metrics put in place under the Affordable Care Act are taking up an increasing share of your time, detracting from the amount of time you can spend seeing patients (making more revenue) and attending to your personal matters (like your finances)1 [+] Read More

Medicare Changes and Your Retirement Plan

August 26, 2015

Back in 2013, we wrote about the differences between Medicare Parts A and B, as well as supplementary coverage options to help readers with their retirement planning. Given recent legislative changes to Medicare, we feel it’s time to revisit the topic. Discussing medical costs and coverage with your financial advisor is wise because medical costs can constitute a sizable portion of post-retirement budgets. As changes are made to programs like Medicare, it’s important to stay abreast of developments and integrate changes in to your wealth planning strategy. One of the difficult aspects of planning for the future is trying to anticipate unknowns such as medical costs. You never know if you’ll enjoy perfect health in the coming year or if you’ll find yourself at the doctor’s office frequently. Insurance like Medicare helps to temper the risk of the unknown, but you should still be prepared for out-of-pocket costs. [+] Read More