Much like a pilot going through his pre-flight checklist before takeoff, it’s important you examine your pre-retirement checklist before walking away from a paycheck. Eric explains the items on that list.
(Click the featured times below to jump forward in the episode)
[1:09] – Retirement Checklist: Examine Your Income Needs.
- Before you walk away from a paycheck, you need to know how much income you’re going to need in retirement. It’s not enough to know how many assets you have. Your success in retirement is much more dependent on income than it is total net worth. Grab a pen and paper, and calculate exactly what you’re going to be spending in retirement.
[2:57] – Retirement Checklist: Determine Where To Withdraw?
- Examine your retirement accounts, and develop a plan for taking withdrawals from them. Consider the tax burden that’s associated with each account. Different accounts are taxed differently, and there are ways to withdraw from them so that you’re not overwhelmed by your tax bill. You want to get the maximum amount of income for the least amount of taxes as possible.
[5:03] – Retirement Checklist: When Is The Ideal Time To Take Social Security?
- Determining when to take Social Security is a crucial conversation to have as it will impact your level of income in retirement. Many folks get excited and want to turn on Social Security as soon as possible, but it’s not always the best strategy, and once you’ve elected to withdraw your benefit, you only have one year to reconsider your decision. Conversely, many folks want to wait as long as possible to withdraw Social Security, knowing the longer you wait the larger the monthly benefit you can withdraw. However, depending on other elements of your financial life, you might be better served to take your benefit at an earlier time.
Check out some other recent episodes
In part two of our series on the SECURE Act, we talk about some of the downsides to the changes. Eric explains the stretch IRA and what impact the SECURE Act made on it.Read More
What happens if you’ve maxed out your 401(k) contribution limit? When is a good time to make a Roth conversion? Eric answers three questions from the mailbag this week all pertaining to the options you have when it comes to saving for retirement.Read More
Are you considering making a move this year? When it comes to home buying or selling decisions, there are a lot of factors to consider. Eric answers a few questions from the mailbag related to real estate.Read More