The Essentials of Retirement Planning

  By Daniel Bloom
Daniel Bloom

Some people see retirement planning as determining how much money you need to retire. Once you reach that number, then you retire and enjoy the ride. Retirement planning, however, is much more complicated than that.

Yes, accumulation is important. But once you accumulate that theoretical number, developing a plan to optimize and protect your retirement income for the balance of your life, no matter how long you live, is critically important.

Thoughtful planning to provide a secure, increasing income for, perhaps, 30 years or longer requires a thorough understanding of investments, insurance products, safe withdrawal rates, and tax planning.

The following are some examples:

  • During recent market volatility, numerous unproven annuity products have claimed to provide significant investment returns while guaranteeing against any market loss. These claims are generally suspect or misunderstood.
  • Bonds can play an important role in counterbalancing stocks within your portfolio. However, some people avoid bonds altogether because they do not see opportunity to earn meaningful returns. Others concentrate their portfolios only in bonds because they want to avoid stock market volatility. Both of these approaches will likely be dangerous to your financial wellbeing.

Here are some questions you’ll need to consider:

  • How much can you safely withdraw from your portfolio each year?
  • Will you be able to increase your income to overcome inflation?
  • What is your tax strategy?
  • What types of insurance coverage do you need to protect your financial well-being?

Good retirement planning does not just prepare you to retire but also develops a sound strategy once you retire. Work with a trusted, fiduciary planner to develop a sound retirement strategy.

For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.