Here are some important steps to help make sure you are on the path to reaching your retirement dreams - however near or far that goal is.
If your employer offers you the opportunity to contribute to an employer-sponsored retirement plan, such as a 401(k), 403(b) or Simple IRA, take full advantage of it. If you are not able to "max" out your contributions every year, try to contribute enough to get the full match if one is offered. A retirement plan match is essentially free money your employer is contributing on your behalf that grows tax-deferred.
If you are already contributing the maximum amount to your employer's retirement plan (or if you don't have that option), look at other retirement savings vehicles. IRAs, Roth IRAs and annuities are all common retirement savings vehicles. Each operates a little bit differently, and there are pros and cons associated with each one.
It's important to talk to a financial professional who can explain the options available to you, so you can make an informed decision about what vehicle to use and, if you are investing assets, about what mix of investments is most likely to help you reach your retirement goals.
When you are evaluating your retirement readiness, it's also a good time to look at your life insurance needs - and your coverage. Life events like a new baby, paying off a mortgage, or other major changes can necessitate changes to your coverage. While some of your needs may have changed over the years, don't make the mistake of assuming you no longer need any life insurance.
Depending on your goals, your life insurance policy can be used to pay final expenses, debts, and tax obligations when you die. It can also be an important component to leave a legacy for your loved ones or to support your favorite charitable organizations. You may want to talk to an insurance professional to find out if including permanent life insurance in your retirement planning strategy makes sense. With permanent insurance, like universal life insurance policies, you have the option of setting aside extra money in the policy's cash value account with every premium payment you make. That cash value is credited with what is usually a competitive interest rate, and it grows tax-deferred.
And, unlike making contributions to your 401(k) or IRA accounts, there is no limit to the amount you can earn in order to contribute and no limit to the amount of money you can put into your policy. Overfunding a policy could mean that the policy will have an atypical tax treatment; however, that is determined on a case-by-case basis and may be well worth the tradeoff of being able to better fund your retirement goals.
An annuity is a retirement savings vehicle that is more customized to the individual than a standard savings plan. Since you’re able to choose how you want to receive money when you annuitize the contract, you have more control over the payments you receive than you would with a standard 401(k). With a 401(k), you will have to pay a fee if you withdraw money before the designated age – usually age 59.5.
Most people purchase an annuity later in life. This option is popular among people who have already maxed out their 401(k) or IRA, as it provides another tax-sheltered option to save money for retirement. An annuity is generally recommended if you want to schedule a guaranteed income stream in retirement but also want a stable option that doesn’t sway with the stock market.
Depending on where you are in your career, it may make sense to explore disability income insurance and critical illness insurance as well as long-term care coverage, to help protect what you have worked a lifetime to accumulate.
An independent insurance professional at RSF Group can help you evaluate what types of coverage you have today, and estimate what your future needs will be, before proposing products to meet your needs.
Determining how much money you will need for retirement takes some careful planning. You will need to consider your estimated social security benefits, any pension or other expected income, evaluate your current retirement holdings (including cash value in your life insurance policies), and make educated guesses about what the future will hold.
The good news is that you don't have to go it alone: the insurance professionals from RSF Group can provide valuable input and insight, helping make sure your retirement gets - and stays - on track.
At RSF Group, we want to help you achieve your dream retirement. As a truly independent provider, we offer insurance products and retirement solutions from more than 30 well-known insurance companies. We'll work with you to help you identify your needs. Then, we'll find products that we think will best meet those needs.
To get started, request a quote for more information on retirement solutions today – our insurance professionals can help you find the retirement solution that best matches your goals. And with video conferencing available, we can help you get a plan in place from the comfort of home.
