Income Strategies: 6 Steps to Planning Your Retirement
For many retired Americans, finding assets to cover everyday expenses can be a challenging endeavor. Making sure you have a defined strategy ahead of time can assist in making your transition to retirement go smoothly and help you better enjoy your newfound leisure time.
Understanding your lifestyle plans, identifying your income streams, and documenting your spending needs are all a part of proper retirement planning. Consider these six steps in preparing for your own retirement:
- Design a personal retirement plan.
- Review your essential and discretionary expenses.
- Evaluate your sources of retirement income.
- Identify and examine any potential disparities between planned income and expenses in retirement.
- Position your assets to help generate income and identify other potential income sources.
- Complete a Personal Assessment to help organize your finances and prioritize your needs. Bring this completed worksheet with you to a complimentary appointment with one our CFS* Investment Advisors to help you strategize your retirement!
Retirement Planning Milestones
If you are over the age of 50, you qualify for catch-up contributions to certain retirement plans. Your CFS* Investment Advisor can help you make the most of your retirement planning by reviewing your contribution limits.
Have you been planning for an early retirement? Speak with your CFS* Investment Advisor about your retirement savings and consider your options while helping to potentially avoid taxes or penalties.
Once you reach 59 1/2, you may begin distributions from certain retirement plans without paying the 10% IRS penalty. At this age you may be able to perform an In-Service rollover out of a qualified 401(k) or 403(b) plan to an IRA without tax ramifications, even if you are still employed with the company administering your plan.** Your CFS* Investment Advisors can help you through the process, whether you are performing a one-time withdrawal, setting up recurring distributions, or coordinating an In-Service rollover.
While you may begin receiving Social Security benefits at age 62, you will be leaving some of your potential benefits on the table by starting this early. Speak with a CFS* Investment Advisor about your current savings and retirement planning to help decide if you may be able to postpone these distributions until you can take advantage of the full benefits at age 66.
Congratulations! You have reached the age where you are now eligible to retire with full Social Security benefits, sometimes referred to as full retirement age. Depending on your date of birth, you may actually qualify as early as age 66. A CFS* Investment Advisor can help you assess your retirement savings and set a retirement date that works with your plans for the next stage in your life.
At age 70 1/2, many IRAs and other retirement plans will require that you take a minimum annual distribution to avoid IRS penalties. Speaking with a CFS* Investment Advisor can help you set a plan for your distributions to help ensure you are able to maximize your hard-earned savings and enjoy a comfortable retirement.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and 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. Bay Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
**Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.