Planning for your retirement involves two major factors: First, planning your investments prior to retirement, and second, planning how to distribute assets during retirement. Choosing the right retirement distribution schedule for you means evaluating how you want to use your money during retirement, then developing a plan that will suit these needs. Together with your retirement planner, you can evaluate your retirement plan and estimate your future financial requirements to plan a distribution schedule that will ensure you can live the life you want throughout your retirement years.
Estimate Your Expenditures
Once you are no longer earning a salary, you will still need a certain monthly income to live comfortably. This monthly income is based on several factors, including the size and location of your home, your planned daily activities, and whether you’d like to plan for travel and other expenses as well. Together with your retirement planner, you can develop an estimate for your predicted monthly expenditures, and then base your retirement distributions on this amount to ensure you will be able to live the lifestyle you envision.
Plan to Tap Taxable Funds First
There are two types of retirement investment vehicles: taxable accounts and tax-deferred accounts. Tapping your taxable funds first allows your tax-deferred accounts to continue earning money for as long as possible before you withdraw it. If you have a 401(k) plan or an IRA account, you are not required to take distributions from these accounts until you reach the age of 70.5, allowing you to leave their funds untouched past the age of 59.5.
It’s never too early or too late to develop a smart retirement plan that will suit your needs after you stop working. Whether you are just starting to think about the benefits of retirement investing or you want to update your current retirement solution in Tucson, Financial Directions, LLC is here to help. You can reach one of our experienced retirement planners by phone at (520) 408-7777, or visit our website for more information on our retirement planning and other financial services.
