Listen and subscribe to decoding pension Apple PodcastIs it Spotifyor wherever you find your favorite podcast.
Retirement is no longer just golf course chairs, gardening, grandchildren or afternoons.
Instead, it evolves from what many think that the traditional retirement is something much more dynamic, said Andy Smith, the Edelman Financial Engine Financial Planning Director.
“I think it is important that people remember that there is no right solution for everyone, how to retire, planning a retirement,” said Smith in a recent Decoding Retlement Podcast episode (see video above or listen below). “There is no one right way to retire.”
Historically, many retired as time to focus on relaxation and family, he added. But that vision is changing.
“Almost four out of 10 Americans, about 39% of respondents, said they wanted this adventure -filled retirement,” Smith said, quoting the company’s daily assets in America. “And 42% of respondents said they want to stay active. There is a growing number that thinks about this minimalist or even nomadic lifestyle or even imagines.”
This shift requires retirees and advisers to think about how they plan their income and expenses. Instead of a linear, one -time pension transition, planning must take into account whether the pension is revealed at the same time or in stages, Smith said.
Will a non -full -time work, consultation or income from travel or passion projects? How often do you travel and what part of the year? These issues affect not only your budget, but also how and when you withdraw your money.
In the past, the usual approach was to evaluate the retirement nest egg, adapt to inflation and taxes and draw stablely. But this approach gives way to a segmental plan, Smith said.
“What will the first three – five years look like? And how are the other three – five?” he asked. “And if people can see how it occurs over time, then they can feel much more comfortable spending different dollars in different ways.”
Smith noted that one challenge begins when retirement: Roth IRA, traditional 401 (K), HSA, mediation accounts and social security – without raising unnecessary taxes.
Smith, according to Smith, is a detailed financial plan. “You have to figure out what you have and how much you have until you can ever create such a plan.”
This means that you need to understand your entire financial image, including your sources of income, expected benefits, expenses, and how your assets are structured in different types of accounts. Without this basis, it is impossible to create an effective, tax -saving retirement strategy.
You can find yourself in an unusually small tax group before a retirement before retirement before social security or pension income. “It can be the lowest holder where you have ever been a lifetime,” Smith said.
This can do a reasonable time from the traditional IRA or 401 (k) s before reaching the required minimum distribution (RMD), allowing you to “fill in” smaller tax groups and then avoid higher taxes.
When guaranteed income begins, your strategy may change. Mediation accounts can be more efficient as long -term capital gains are often taxed at 15% or even 0% for lower earnings. For 2024 Smith noted that individual voters earned less than $ 48,000, while married couples earning less than $ 96,000 could receive a rate of 0% capital gain.
An older couple traveling by a classic MG convertible car, a two -lane rural motorway. (Don and Melinda Crawford/UCG/Universal Images Group via Getty Images) ·UCG via Getty Images
The conclusion of a tax -saving retirement plan is only one part of the pension equation. Choosing the right income strategy, whether it is 4% rule, bucket planning, annuities, or hybrid approach, is equally critical.
Here comes professional help.
“I think it is imperative that people absolutely consider working with a professional,” Smith said. “It’s not just an investment management game. It is a holistic financial planning because if it has a dollar sign, it will be important for you to try to figure out.”
Smith encouraged pensioners to ask the right questions when choosing a financial advisor:
“Are you a trustee?”
“How much will it cost at all?”
“What will happen to me if something happens to you?”
After all, the goal is to turn your life savings into a reliable, tax income pension income flow. “When you retire you have this property you have spent your lifetime,” Smith said. “Now it’s your job not to save, but to know: How do I draw it? Where can I get out of money? How do I get out of money? When and how much?”
Smith pondered how his own unexpected path from Wilderness Emure Medicine to financial planning helped him learn the basic lessons.
“There was a time in my life when I was serious about becoming a mountain guide,” he said.
Those workouts were strict in the morning in the laboratory and in the afternoons of practical outdoor work. But Smith said he had learned to “plan the worst, expect the best and not to be disappointed with averages.”
That philosophy is transferred to pension planning.
“We were very planning for your work and worked on your plan,” Smith said. “It is not found that the shelf and wind is about them.
And most importantly, he continued, “Not only do the plan – try it because what looks good on the paper, what looks good in the classroom does not always work on the side of the mountain when it is 10 degrees below zero.”
Robert Powell, a pension expert and financial educator every Tuesday, gives you tools to plan your future Decoding pension; More episodes can be found in our Image center Or observe your own The broadcast service is desirable;
