If you’re nearing the end of a long career or have recently retired, you know something about what it takes to be successful. Luck can help, but hard work and proper planning are much more important. It’s the same with retirement. Deciding where your income will come from, working to help minimize your tax burden, and knowing how much you’re paying in fees are important parts of creating a solid retirement plan. Here’s what to know if you want to protect your retirement income.
What will Your Income Sources be?
Once you know what your expenses in retirement will be like and how much you can expect from Social Security, you can work on filling in the gap. Figure out where the money will come from, how confident you are you can count on it, and how it will be taxed. If you think you’re taking on too much investment risk or unsure how your savings in an IRA, 401(K), or similar retirement account can best be used as retirement income, an advisor can help. There are many guaranteed income options available, and there is no one size fits all solution.
Minimize Your Tax Burden
A survey found that 32% of retirees with $150,000 or more of investable assets said they wished they had been better prepared for paying taxes in retirement. While market pullbacks and inflation have taken your attention, it’s still important to know tax minimization strategies in 2022 and beyond. This is particularly true if you have a large chunk of your nest egg in a taxable retirement account. There are many potential strategies: Depending on your situation, you might consider a Roth conversion, offsetting investment gains with losses, or working to help minimize taxes on home sales and rental property sales.
Know How Much You’re Paying in Fees For Your Retirement Accounts
According to the Boston College Center for Retirement Research, paying an annual fee of 50 basis points for 30 years can reduce the purchasing power of savings in a retirement account by one-eighth. Fees typically range from under 0.5% to over 2%. 2% might not seem like much, but let’s compare a 401(k) plan that charges 2% in fees to one that charges 1%. Both start with a balance of $100,000 and have an expected annual rate of return of 8%. After 30 years, the account paying 2% in fees would grow to $574,350. Meanwhile, the account paying 1% in fees would grow to $761,225. It’s important to know how much you’re paying in Mutual Fund and ETF fees as well.
Don’t leave your retirement income to chance, and don’t feel that you’re alone when planning for retirement. Our team of professionals is here to help you cover all aspects of your finances so you can retire with a solid plan in place. Sign up for a complimentary review so that we can learn more about your retirement concerns and goals.
All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results.
Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Chris Bulman Inc. dba Bulman Wealth Group an SEC Investment Advisor notice filed in California, Pennsylvania, Texas, and Nevada. Investment Advisory Services also offered through Retirement Wealth Advisors, LLC. a Registered Investment Advisor. Bulman Wealth Group and Retirement Wealth Advisors, LLC. are separate entities, independently owned. Insurance products and services offered through Chris Bulman Inc dba BWG Insurance Agency and Ameritas Life Insurance Corp. CA Insurance License #0D57586. Being registered as an investment adviser does not imply a certain level of skill or training.
Bulman Wealth Group, BWG Insurance Agency and Ameritas Life Insurance Corp. are not affiliated with or endorsed by the Social Security Administration or any other government agency.
The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the States of California, Pennsylvania, Texas, Nevada, or where otherwise legally permitted.
Images and photographs are included for the sole purpose of visually enhancing the website. None of them are photographs of current or former Clients. They should not be construed as an endorsement or testimonial from any of the persons in the photograph.
Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.