Comfortable Retirement

Whether you’re ten years away, or just starting to think about retirement planning, this episode will walk you through the key steps to help ensure a financially secure and fulfilling retirement. So grab a cup of coffee, and let’s talk about your future."

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Transcript

[00:00:01] Speaker 1: Welcome to Wealth Grow, where we discuss building wealth, securing your future, and making informed financial decisions. [00:00:08] Speaker 1: My name is Stuart Cameron, OSJ branch manager and financial advisor [00:00:13] Speaker 1: with Wharton Investment Consultants. [00:00:16] Speaker 1: And today, we are diving into a topic that affects everyone eventually, [00:00:20] Speaker 1: preparing for a comfortable retirement. [00:00:24] Speaker 1: Whether you're ten years away or just starting to think about retirement planning, [00:00:28] Speaker 1: this episode will walk you through the key steps [00:00:31] Speaker 1: to help ensure a financially secure and fulfilling [00:00:35] Speaker 1: retirement. [00:00:36] Speaker 1: So grab a cup of coffee and let's talk about your future. [00:00:41] Speaker 1: So what does comfortable retirement mean? [00:00:45] Speaker 1: Let's begin with the question we all have to ask. [00:00:48] Speaker 1: What does a comfortable retirement look like for you? [00:00:52] Speaker 1: Comfort means different things to different people. For some, it's freedom to travel. [00:00:58] Speaker 1: For others, it's simply the ability to pay bills, stay healthy, and enjoy time with family. [00:01:05] Speaker 1: Think about location. [00:01:07] Speaker 1: Will you stay where you are? [00:01:10] Speaker 1: Downsize [00:01:11] Speaker 1: or move somewhere more affordable or warmer? [00:01:16] Speaker 1: Lifestyle matters. Do you want to golf, [00:01:19] Speaker 1: volunteer, [00:01:20] Speaker 1: go back to school, [00:01:22] Speaker 1: or relax with grandkids? [00:01:25] Speaker 1: And visualize your ideal day in retirement. [00:01:27] Speaker 1: Who are you with? [00:01:29] Speaker 1: What are you doing? [00:01:31] Speaker 1: How do you want to feel? [00:01:33] Speaker 1: Once you define what a fulfilling retirement looks like, it becomes much easier to reverse engineer [00:01:40] Speaker 1: a financial plan [00:01:54] Speaker 1: and income sources. [00:01:58] Speaker 1: The 4% rule, [00:02:00] Speaker 1: for every 1,000,000 saved, you can safely withdraw about 40,000 [00:02:04] Speaker 1: a year. [00:02:06] Speaker 1: Consider that most retirees will spend twenty to thirty years in [00:02:11] Speaker 1: retirement. Planning for longevity [00:02:13] Speaker 1: is key. [00:02:15] Speaker 1: Factor in inflation. Today's 50,000 [00:02:18] Speaker 1: won't have the same purchasing power twenty years from now. [00:02:23] Speaker 1: Create a retirement [00:02:25] Speaker 1: budget. There's fixed costs, housing, food, [00:02:28] Speaker 1: insurance. [00:02:30] Speaker 1: Discretionary, [00:02:32] Speaker 1: travel, [00:02:32] Speaker 1: dining, hobbies. [00:02:35] Speaker 1: And there's unexpected [00:02:36] Speaker 1: health issues, family support, [00:02:39] Speaker 1: and and home repairs. [00:02:41] Speaker 1: And don't forget taxes. Your withdrawals from four zero one k's and IRAs [00:02:45] Speaker 1: are often taxable. [00:02:49] Speaker 1: Use retirement calculators and run multiple scenarios to test your different assumptions. [00:02:57] Speaker 1: Saving and investing for retirement. [00:03:00] Speaker 1: The Best time to start saving was yesterday. [00:03:03] Speaker 1: The second Best time is today. [00:03:07] Speaker 1: Start with tax advantage accounts, four zero one k, [00:03:10] Speaker 1: Roth IRA, [00:03:12] Speaker 1: traditional IRA. [00:03:14] Speaker 1: The twenty twenty five contribution limits, [00:03:17] Speaker 1: four zero one k, 23,000 [00:03:19] Speaker 1: plus 7,500[00:03:21] Speaker 1: catch up for those 50. [00:03:24] Speaker 1: IRA, [00:03:25] Speaker 1: 7,000 [00:03:27] Speaker 1: plus a thousand dollars catch up. [00:03:29] Speaker 1: Employer matching, don't leave free money on the table. [00:03:34] Speaker 1: Diversify [00:03:35] Speaker 1: your portfolio [00:03:36] Speaker 1: across stocks, [00:03:38] Speaker 1: Bonds, and other assets. [00:03:41] Speaker 1: As retirement approaches, [00:03:43] Speaker 1: reduce risk by shifting towards more stable investments. [00:03:48] Speaker 1: Target Date Funds can help. [00:03:51] Speaker 1: Automate contributions [00:03:52] Speaker 1: to stay consistent. [00:03:55] Speaker 1: Remember, compound [00:03:56] Speaker 1: interest is your Best friend. [00:03:58] Speaker 1: The more time your money has to grow, [00:04:01] Speaker 1: the better. [00:04:04] Speaker 1: Timing your retirement and claiming Social [00:04:07] Speaker 1: Security. Let's talk about when. [00:04:11] Speaker 1: Timing your retirement is just as strategic [00:04:13] Speaker 1: strategic as saving for it. [00:04:16] Speaker 1: Social Security. Claim as early as 62 [00:04:20] Speaker 1: or delay until 70. [00:04:23] Speaker 1: Full retirement age, FRA, [00:04:26] Speaker 1: 67 for those born after 1960. [00:04:30] Speaker 1: The pros of delaying [00:04:32] Speaker 1: benefits increase about 8% each year after FRA [00:04:35] Speaker 1: until the age 70. [00:04:38] Speaker 1: Consider spousal strategies [00:04:40] Speaker 1: and survival benefits. [00:04:43] Speaker 1: Working longer boosts your savings, [00:04:45] Speaker 1: reduces your withdrawal period, and increase [00:04:50] Speaker 1: benefits. Consider a phased out retirement or part time work for income and purpose. [00:04:58] Speaker 1: Healthcare and long term care. [00:05:01] Speaker 1: Healthcare is one of the most underestimated [00:05:03] Speaker 1: costs in [00:05:05] Speaker 1: retirement. Medicare starts at 65, [00:05:08] Speaker 1: so no parts a, [00:05:10] Speaker 1: b, [00:05:11] Speaker 1: c, [00:05:12] Speaker 1: d, [00:05:13] Speaker 1: and Medicap. [00:05:15] Speaker 1: Out of pocket costs, [00:05:17] Speaker 1: premiums, co pays, deductibles, [00:05:20] Speaker 1: HSA, [00:05:21] Speaker 1: health savings accounts can be a powerful tool if you're still working. [00:05:26] Speaker 1: Long term care, [00:05:28] Speaker 1: assisted living, [00:05:30] Speaker 1: nursing homes, and then home care can cost 50 to a $100,000 [00:05:35] Speaker 1: plus [00:05:35] Speaker 1: annually. [00:05:37] Speaker 1: Consider long term care insurance [00:05:39] Speaker 1: or self insuring with eMark savings. [00:05:43] Speaker 1: Stay active and prioritize preventive care. [00:05:47] Speaker 1: A healthy retirement is often a cheaper one. [00:05:52] Speaker 1: Creating a retirement income strategy. [00:05:55] Speaker 1: Retirement isn't just about saving, [00:05:57] Speaker 1: it's about how you spend what you saved. [00:06:02] Speaker 1: Convert assets into income, Social Security,[00:06:05] Speaker 1: pensions, [00:06:06] Speaker 1: annuities, [00:06:07] Speaker 1: investment withdrawals. [00:06:10] Speaker 1: The bucketing strategy, short term cash, [00:06:13] Speaker 1: mid term Bonds, [00:06:14] Speaker 1: and long term stocks. [00:06:18] Speaker 1: safe withdrawal rate, typically three to 4% [00:06:21] Speaker 1: adjusted for inflation. [00:06:24] Speaker 1: Sequence of returns risks. [00:06:27] Speaker 1: Losses early in retirement [00:06:29] Speaker 1: can have a lasting impact. [00:06:32] Speaker 1: A stable income plan gives you more confidence to enjoy retirement [00:06:36] Speaker 1: without watching every penny. [00:06:40] Speaker 1: Estate Planning and leaving a legacy. [00:06:43] Speaker 1: Planning for your retirement also means thinking about what happens after you're gone. [00:06:49] Speaker 1: Update wolves and powers of attorney regularly. [00:06:53] Speaker 1: Designate and review your beneficiaries. [00:06:56] Speaker 1: Use trust to defend assets or control distributions. [00:07:01] Speaker 1: Charitable giving and Donor Advised Funds. [00:07:05] Speaker 1: And talk to your family about your wishes to avoid confusion later. [00:07:11] Speaker 1: So let's wrap up. [00:07:13] Speaker 1: Preparing for a comfortable retirement comes down to these core ideas. [00:07:18] Speaker 1: Define your personal vision of comfort. [00:07:22] Speaker 1: Save consistently and invest smartly. [00:07:26] Speaker 1: Time your retirement [00:07:27] Speaker 1: and Social Security wisely. [00:07:30] Speaker 1: Plan for health care costs and long term care. [00:07:35] Speaker 1: Build a sustainable income stream [00:07:37] Speaker 1: and protect your loved ones with Estate Planning. [00:07:41] Speaker 1: Almost importantly, [00:07:43] Speaker 1: revisit your plan regularly [00:07:45] Speaker 1: and adjust as life changes. [00:07:49] Speaker 1: Thanks for joining me on this episode of Wealth Grow. If you found this helpful, please subscribe and leave us a review. [00:07:56] Speaker 1: Got questions or a topic you'd like us to cover? [00:07:59] Speaker 1: Reach out on social media or at Wharton IC [00:08:03] Speaker 1: at Cetera Networks dot com. [00:08:06] Speaker 1: Thanks for listening. [00:08:07] Speaker 1: And until next time, plan wisely, [00:08:10] Speaker 1: invest smartly, [00:08:12] Speaker 1: and build a legacy that lasts. [00:08:14] Speaker 1: These podcasts are brought to you by Wharton Investment Consultants, [00:08:18] Speaker 1: 5010 Cambie Drive, Wilmington, Delaware [00:08:22] Speaker 1: 19808. [00:08:24] Speaker 1: Telephone, (302) [00:08:26] Speaker 1: 239-2111. [00:08:31] Speaker 2: Securities offered through Cetera Wealth Services, [00:08:34] Speaker 2: LLC, [00:08:35] Speaker 2: member FINRA [00:08:37] Speaker 2: SIPC, [00:08:38] Speaker 2: advisory services offered through Cetera Investment Advisors, LLC, [00:08:43] Speaker 2: a registered investment adviser. [00:08:45] Speaker 2: The views depicted in this material are for information purposes only and are not necessarily those of Wealth Services [00:08:53] Speaker 2: LLC. [00:08:54] Speaker 2: They should not be considered specific advice or recommendations [00:08:57] Speaker 2: for any individual. [00:09:00] Speaker 2: Neither Cetera, Advisor Networks, LLC, [00:09:03] Speaker 2: nor any of its representatives may give legal or tax advice. [00:09:08] Speaker 2: All investing involves risk, Cetera [00:09:10] Speaker 2: including the possible loss of principal.[00:09:13] Speaker 2: There is no assurance that any investment strategy will be successful. [00:09:18] Speaker 2: The opinions contained in this material are those of the author and not a recommendation [00:09:23] Speaker 2: or solicitation to buy or sell investment products. [00:09:27] Speaker 2: This information is from sources believed to be reliable, [00:09:31] Speaker 2: but Cetera Advisor Networks LLC [00:09:34] Speaker 2: cannot guarantee [00:09:35] Speaker 2: or represent that it is accurate or complete. [00:09:39] Speaker 2: The use of trust involves a complex web of tax rules and regulations. [00:09:44] Speaker 2: You should consider the counsel of an experienced [00:09:48] Speaker 2: before implementing such strategies. Estate Planning professional [00:09:51] Speaker 2: This information may not be relied on for the purpose of determining your Social Security benefits or eligibility [00:09:57] Speaker 2: or avoiding any federal tax penalties. [00:10:01] Speaker 2: You are encouraged to seek advice from your own tax or legal professional. [00:10:06] Speaker 2: A diversified portfolio [00:10:08] Speaker 2: does not assure a profit or protect against loss in a declining market. [00:10:13] Speaker 2: Limitations and early withdrawals. [00:10:15] Speaker 2: Some IRAs have contribution limitations and tax consequences for early withdrawals. [00:10:22] Speaker 2: For complete details, [00:10:24] Speaker 2: consult your tax adviser or attorney. [00:10:27] Speaker 2: Retirement plans. [00:10:29] Speaker 2: Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income, and if taken prior to reaching age 59, [00:10:39] Speaker 2: may be subject to an additional 10% IRS tax penalty. [00:10:44] Speaker 2: Roth IRA. [00:10:45] Speaker 2: Converting from a traditional IRA to a Roth IRA is a taxable event. [00:10:50] Speaker 2: A Roth IRA offers tax free withdrawals on taxable contributions. [00:10:56] Speaker 2: To qualify for the tax free and penalty free withdrawal or earnings, [00:11:00] Speaker 2: a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 [00:11:08] Speaker 2: or due to death, disability, [00:11:10] Speaker 2: or a first time home purchase [00:11:12] Speaker 2: up to a $10,000 [00:11:14] Speaker 2: lifetime maximum. [00:11:16] Speaker 2: Depending on state law, [00:11:18] Speaker 2: Roth IRA distributions may be subject to state taxes. [00:11:22] Speaker 2: The return and principal value of stocks fluctuate with changes in market conditions. [00:11:28] Speaker 2: Shares when sold may be worth more or less than their original cost. [00:11:33] Speaker 2: The return and principal value of Bonds fluctuate with changes in market conditions. [00:11:39] Speaker 2: If Bonds are not held to maturity, [00:11:41] Speaker 2: they may be worth more or less than their original value. [00:11:45] Speaker 2: The Target date of a Target date fund may be a useful starting point in selecting a fund, [00:11:50] Speaker 2: but investors should not rely solely on the date when choosing a fund or deciding to remain invested in one. [00:11:58] Speaker 2: Investors should consider funds Asset Allocation over the whole life of the fund. [00:12:03] Speaker 2: Often Target Date Funds invest in other Mutual Funds and fees may be charged by both the and the underlying Mutual Funds. [00:12:13] Speaker 2: The principal value of these funds is not guaranteed at any time, including at the Target date fund Target date. [00:12:19] Speaker 2: Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501 [00:12:28] Speaker 2: c. [00:12:29] Speaker 2: Three, organization, [00:12:31] Speaker 2: which is called a sponsoring organization. [00:12:34] Speaker 2: Each account is composed of contributions [00:12:36] Speaker 2: made by individual donors. [00:12:38] Speaker 2: Once the donor makes the contribution, [00:12:41] Speaker 2: the organization has legal control over it. [00:12:44] Speaker 2: However, the donor or the donor's representative [00:12:48] Speaker 2: retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. [00:12:55] Speaker 2: Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.