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A Guideline for Retirement Planning

July 22, 2021
Many people can’t wait to retire after decades of hard work. Others can’t imagine life without their careers. And others find themselves somewhere in between.

One part of retirement that might feel scary is ensuring you’ll have enough money to continue the quality of life you enjoyed while you were working. Retirement takes a lot of planning, but that planning is worth it when you can retire and enjoy life instead of worrying about how you’re going to pay bills.

Whether you want to retire soon or are years away, here are a few tips to get you started with retirement planning.

Assess Your Retirement Savings and Other Assets

Retirement savings can come from many sources: IRAs (both traditional and Roth), 401(k) accounts, SIMPLE IRAs, pensions, profit-sharing plans, employee stock ownership plans (ESOPs), and others. Take a good look at how much you have in your accounts and determine if you will incur a penalty or will need to pay taxes when you begin drawing from them.

It’s never too late to save for retirement with an IRA.

Learn why an IRA might be right for you.

You should also assess your home, investments, and non-retirement savings, so you know all the assets that may be available once you retire.

Look at Your Mortgage

As you approach retirement, consider where you want to live and how much you’re willing to spend on housing. If you own a home, you’ll be bringing a strong asset with you into retirement, but you might also be bringing a big mortgage payment. You could choose to keep the house you are living in or move into something smaller. If you’re not happy with your current mortgage payment, an option is to refinance it into a loan that offers a lower monthly payment or that pays off the loan faster. You might even consider renting. Whatever choice you’re leaning towards, determine your available options now so you can better budget for your retirement.

Map Out Social Security

Social Security provides another source of income for retirees, but the program has rules on when you can collect and how much you’ll receive. You can start drawing Social Security as early as age 62. If you wait until you reach full retirement age to start collecting (as late as age 70, depending on when you were born), you’ll receive more money each month.

What you'll need to decide is whether you should start drawing sooner and receive less money in the long term, or do you go without the additional income now for more stability later on? Determining the answer to that question isn’t easy, but careful retirement planning can help.

Think About Health Insurance

Most people can enroll in Medicare at age 65, but it doesn’t cover everything. For example, long-term care and most dental procedures are not covered. Medicare A covers hospital stays and inpatient treatment and it’s free for most Americans. Medicare B covers preventative medicine and doctor visits, but it generally isn’t free.

Although Medicare A decreases medical costs for retirees, many people realize that they also need Medicare B, private supplemental insurance, or some combination that covers everything else. Depending on when you retire and your overall health, you could easily live 20 years or more after retirement, so thinking about your insurance needs now can provide some peace of mind later.

Decide How You’ll Spend Your Days

Retirement shouldn’t be so much of an ending as it is the beginning of a new adventure. What you want that adventure to be will shape your financial plans. Do you want to work part time even after you retire? Travel? Volunteer? Golf every day? Or simply relax and enjoy the easy life? So many options are available and you don’t have to pick just one.

However, you do need to consider how much your retirement vision might cost. Exploring the country in an RV is a great idea, but you don’t want to find out after you retire that you can’t afford to buy a big camper or the gas needed to travel the United States.

Make a Plan

Retirement planning shouldn’t be difficult, but there is so much to think about. Once you sort through your retirement accounts, Social Security, Medicare options, and your post-retirement goals, you can create a broad plan. Again, you need to think ahead a couple decades, which is why a good plan is so important.

All of this may seem a little overwhelming, but you don’t need to figure it out on your own. Contact our financial advisor at 1st United through CUSO Financial Services, L.P.* Rahil is available to help you plan your financial future so you can focus on the adventures ahead.
This information brought to you by:

Rahil Machiwalla, CFS Financial Adivsor
Rahil Machiwalla, CUSO Financial Services, L.P.*
Financial Advisor
(925) 598-4718 | rahil.machiwalla@cusonet.com
CA Insurance Number: 0G20361

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to Credit Union members. Please consult a qualified tax advisor for specific tax advice.
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