Ever find yourself bogged down or intimidated by all the things you're supposed to have done to prepare for retirement?
It's true that's there's a lot to consider as you plan for retirement. But sometimes, as my mother used to say, "It's hard to see the forest for the trees."
In other words, it's easy to get too involved in the details of retirement planning and fail to look at your situation as a whole.
So...when you think about retirement planning, take a deep breath, stand back and think about the two factors you absolutely must manage to be able to get to retirement and to stay retired:
One. Your income
Two. Your expenses
That's it! Sounds simple but I meet a lot of folks who have been working to build their retirement assets, but have not considered their retirement expenses.
For example, if you believe your monthly spending in retirement will be $4,000 per month but it's actually really closer to $6,000....well...that's $2,000 per month or $24,000 per year more than you think you need for retirement.
How long do you think your retirement savings can handle an extra $24,000 per year in after-tax dollars that you didn't include in your retirement planning?
Retirement is not an event. It's another phase of life and it requires clear thinking and planning.
Start with the big concepts.
Figure out your retirement income and outline your anticipated expenses - including travel, visiting the grand-kids and whatever else you've been looking forward to in this phase of life.
The key is to manage both your retirement income and your expenses. If you do this, you'll go a long way toward building a retirement plan that will last.
I talk to a lot of people who will never be rich, but who certainly don't deserve to be poor. When you plan for your retirement, there are straight forward strategies you can use to help ensure you don't end up outliving your retirement funds.
Over the next few months, I want to share with you four simple, yet powerful, financial strategies that will help you get the most out of your retirement money.
1. Start Planning for Your Retirement Tax Situation NOW!
Everyone hates this piece of advice. Minimizing your tax liability in the future seems a challenging prospect. I know of only a few people who like to spend their time thinking about taxes.
But I promise you - it's where you're going to see some of the greatest gains to your retirement income.
Consider these facts and then answer the question below:
Do you think taxes are going up or down in the future?
I believe taxes are going up.
If the only retirement product you own is a 401(k) or an IRA, or another qualified plan, remember you have just deferred paying tax, not eliminated paying it. The U.S. Department of Revenue wants their cut of your future income.
If you didn't pay tax when you put money into your retirement vehicle, then you're going to pay income tax on it when you take it out. And if tax rates are higher and your retirement deductions lower...you'll end up paying more in tax. A LOT more.
You don't need to grit your teeth, stare straight ahead and just accept this tax situation. There are many financial strategies that will give you tax planning flexibility.
You just need the time to develop a flexible retirement strategy and to implement it. That's the point of planning BEFORE you are ready to retire.
Make the commitment to review your retirement tax scenario NOW.
We can work together to evaluate your retirement tax situation and then choose financial products and strategies that will give you the greatest financial flexibility while reducing your tax burden.