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Baron's Top Ten Priorities When Planning for Retirement

Investing Financial Planning Taxes Retirement Planning Income Planning Social Security

A 60-second read by the Baron Team: If you are thinking about retirement, we strongly suggest you plan ahead and consider what your retirement needs and goals will be and what financial resources are available for you to support your anticipated lifestyle – Your Personal EconomySM.  Don’t forget to also consider potential financial needs that may be unexpected, such as changes to your health, and others – see numbers 3 and 7 below. When your plan is in place, keep in mind that it should be reviewed and revised as circumstances change.

Here are our suggested top ten priorities when planning for retirement: 

1.    Turning wealth into income – create a total return strategy that produces a continuous paycheck just like you had when you were employed

2.    Revising your investment strategy – which was successful for the accumulation phase but may not work as well now during the distribution phase

  • Review your tolerance for risk
  • Review your asset allocation for diversification
  • Review tax-planning strategies

3.    Protecting against new risks and concerns:

  • longevity risk (outliving your wealth)
  • loss of a job
  • a long retirement horizon
  • health changes
  • covering cost of living
  • keeping up with price inflation
  • protecting against principal loss

4.    Determining when and how to take your Social Security Benefits – the decision of when to take Social Security can be very personal. There are various considerations and strategies that you should incorporate in your decision. This type of decision should be personalized to your specific situation and there is no patent right or wrong answer. These are some questions to consider:

  • Will Social Security be there for me?
  • How much can I expect to receive?
  • When should I apply for Social Security?
  • How can I maximize my benefits?
  • Will Social Security be enough to live on in retirement?

5.    Consolidating qualified funds such as 401(k) plans and IRA’s to optimize your benefits – the decision to roll-over or take your 401(k) must be carefully considered. IRAs are tax-favored savings and investment plans designed to accumulate assets for retirement.

  • The IRA is not a particular investment; it is a registration which provides federal income tax benefits for retirement investments (such as money markets, mutual funds, stocks, etc.) within the account.
  • Understand when to use a traditional IRA or a Roth IRA.

6.    Taking Required Minimum Distributions (RMDs)

  • If you were born between 1951 and 1959, your RMD begins when you turn 73. If you were born in 1960 or later, your RMD begins when you turn 75.
  • There may be a penalty if the full RMD is not withdrawn by the due date.

7.    Funding long-term care and medical care costs

  • Evaluate what is right for you
  • Understand the pros and cons of Long-Term Care Insurance and other Health Care Plans, such as Medicare and HSA Policies

8.    Selling a primary residence or buying a retirement home

  • Keep track of property improvements for capital gains tax purposes
  • Determine financing options for purchasing a new home

9.    Selling a business

  • What is the exit plan?
  • Improve your valuation
  • Provide for a smooth transition

10.    Passing wealth on to beneficiaries

Please contact us with any questions.

Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, legal, tax or investment advice. Past performance is no guarantee of future results. Every investment strategy has the potential for profit or loss. Any decision with Social Security should be confirmed with the Social Security administration or by visiting www.ssa.gov. Before implementing any of the ideas presented, please consult with a qualified tax, investment, or legal professional for personal advice. Your Personal Economy refers to the aspects of your financial life that are unique to you.