Financial planning for an ideal retirement can be a tricky and stressful process. Not everyone is a financial advisor or is up to date on the internal jargon of the insurance and financial world. It takes strategy and planning to set yourself up for a stress-free retirement. Do not overlook these essentials when strategizing for retirement.
1. Create a Plan
A retirement plan is just that: a plan. When creating a plan the biggest factor is your goals. Once you have a clear idea of your goals, you can then strategize using tools in the financial planning and insurance market to get you to reach those goals.
Find a qualified financial advisor who specializes in exactly what you need, in terms of goals. Not only should you be planning regarding investments but also consider income planning which is essentially making sure you are paying yourself correctly in your retirement. Tax, legacy and health care planning should all be in discussion with a trusted financial planner.
2. Invest in an Annuity
Annuities, properly structured ones, that include income benefits are the only true investment that will make it unlikely that you will run out of money for the rest of your life during retirement. They are a great way to supplement your 401(k) savings while protecting yourself against market fluctuation. The also provide you with the reassurance that you will not outlive your savings account.
Investing in an annuity is a smart decision but choosing the right type of annuity is even more important. Be sure to invest with a respected company and also educate yourself on what are the obligations of that annuity. Whether it be a variable annuity, that is an investment in mutual funds or a fixed annuity which is more of a conservative investment there are various annuities to be able to fit into your strategy within a strong financial plan.
3. Manage Your Taxes
Since tax rates are always changing, life insurance can also provide future protection against deep increases in tax rates. The right life insurance plan can provide tax-deferred growth, tax-free cash flow, and a tax-free death benefit. This truly allows you to have more control and flexibility over which money to use during retirement.
Again, always refer back to your retirement plan and see how it fits into it because every individual has different needs and goals. Some individuals may benefit from a short-term life insurance plan while others may find a better fit with a more permanent life insurance plan.