Retirement is a significant life transition, there’s no doubt about it.
You’ve been saving and dreaming about your golden years for most of your career. But when the time finally arrives, your mind may be flooded with questions like:
“Will I be ok?”
“How can I be sure of my plan?”
“What if things need to change”
These questions can certainly cause restlessness and uncertainty. But rest assured, we’re here to help alleviate those fears and bring confidence to your retirement journey. Here are the top five questions we get asked when building retirement plans.
Question #1: Will I Have Enough To Retire The Way I Want?
Perhaps the most prevalent question we get asked centers on the idea of having “enough.” In fact, it’s a growing concern for many, especially in uncertain market cycles. So how can you answer “yes” with confidence?
First, by understanding your lifestyle goals. These include things like where you want to live, what you want to do in retirement if you plan on working part-time, and more. When you know how you want to live, you have the ability to “reverse engineer” a financial strategy that helps support those goals. This is a tailored and specific part of the process, so don’t be too worried if your goals look different than those of your parents or your best friend.
If you feel stuck, start by taking stock of what you’re currently spending. Since spending may only fluctuate slightly, it can serve as a good indicator of what your baseline retirement expenses may look like.
Once you have a ballpark figure in mind, it’s helpful to know what you actually have saved and identify potential deficits. Here are some questions to ask yourself about your retirement savings:
- Is my 401(k), IRA, and/or brokerage account on track to meet my retirement income goals?
- Am I maxing out contributions, or do I have the ability to contribute more to these accounts?
- Are my portfolio allocations still aligned with my risk tolerance, timeline toward retirement, and overall goals?
- What fixed income can I rely on in retirement? (This may include Social Security, pension plans, and annuities.)
Next, think about your health and longevity. How long will you really need your nest egg to sustain you? If you have a long family history of people living past 100, the traditional 30-year timeline may not cut it — especially if you plan on retiring early.
Once you have an idea of how much you’ll need to live comfortably, what income sources you can rely on, and how long you plan on spending in retirement, you’re ready to build a strategy. That’s something our team can help you do.
Question #2: How Will I Get Paid?
Without W-2 income, many retirees are concerned about how they will “get paid” in retirement.
That’s where a withdrawal strategy comes into play, which is something we can help you develop. A withdrawal strategy is used to determine which accounts to pull money from in retirement and when. This is done in a way that balances current spending with the potential for future investment growth.
We can also help you establish regular deposits based on your withdrawal strategy. This would feel similar to “getting paid.” For example, we can develop a retirement income strategy that makes sure you see $5,000 hitting your checking account each month.
Question #3: How Can I Manage My Tax Situation?
Tax planning for retirement is integral for long-term financial success. To start, it’s important to know how your different withdrawals and income will be taxed. Examples of income sources include investments, retirement accounts, Social Security, pension plans, and annuities.
To manage your taxes year-round, we use a withdrawal strategy that accounts for the varying tax treatment of these different income sources. We help retirees leverage ongoing tax opportunities, such as Roth conversions, tax loss harvesting, charitable giving, and more. Our goal is to help you keep more of your money working for you during retirement.
Question #4: What Do I Need to Include in an Estate Plan?
Estate and legacy planning is important for every retiree, no matter the size of their bank accounts. By properly coordinating your estate plan, you have the power to pass on assets, memories, and your legacy in a seamless, less stressful way.
We can help you understand your estate and legacy goals and work with your estate planning attorney to ensure the documents reflect your wishes. We’ll happily help review all important documents including
- Beneficiaries on all accounts
- Power of attorney
- Medical directive
- Estate executor
- And more
Question #5: Should I Work With a Financial Advisor in Retirement?
Life is full of changes, and retirement is perhaps the most significant. Having an advisor in your corner to help you plan for income, longevity, taxes, estate planning, and more can bring cohesion, peace of mind, and confidence to your strategy.
When you’re looking for a financial advisor specializing in retirement planning, be sure you understand how they get paid and their duty to you.
At Toberman Wealth, we’re a fee-only, independent, fiduciary firm based in St. Louis. Simply put, this means we operate in your best interest, always. Think of us as your retirement planning partner, helping you navigate your ideal life.
If ever have a question about your retirement planning strategy, feel free to schedule a time to chat with us.
Craig Toberman is the Founder of Toberman Wealth – a fee-only financial advisor based in St. Louis. He assists families and businesses with strategic financial planning and long-term wealth management. He has over a decade of experience in financial services and has crafted custom financial plans for hundreds of families and businesses.
Craig received a Bachelor of Science (B.S.) degree in Agricultural and Consumer Economics from the University of Illinois and a Master of Business Administration (M.B.A.) degree in Finance from Saint Louis University. He is a Certified Financial Planner (CFP), Chartered Financial Analyst (CFA) charterholder, and Certified Public Accountant (CPA).
Craig is a member of the National Association of Personal Financial Advisors (NAPFA), Fee-Only Network, and XY Planning Network.
Craig lives in the greater St. Louis area with his wife, Ally and son, Hank.