Today’s Prep:
What kind of savings do you really need for retirement? Are you working with the right advisor to get you there? Eric answers three questions from listeners.
(Click the featured times below to jump forward in the episode)
Equipping Points:
As you near retirement, you may wonder the best way to proceed. Eric answers three questions from the mailbag, all about what to be aware of as you get into the final planning stages of retirement.
Kate in Urbandale hasn’t been saving 15 percent of her income toward retirement. Will she be stuck eating cat food in retirement? What you need in retirement is really dependent on your situation. You might want to work part-time for extra income, develop rental income, or take withdrawals from retirement savings. Look at how much you need to get to reach your goal. If you’re unable to get to 15 percent, you want to get at least enough to reach the match in your 401(k) if it is offered. It’s likely not as dire as you’re thinking, but you may want to sit down with a professional to see where you stand.
Ricky from Des Moines questions if he should continue to work with a financial advisor who is older than him or move on to someone else who won’t retire before he does. Eric says to consider the wealth of experience an older advisor likely has. You’ll want a continuity plan, a succession plan for the team you’re working with, but more than anything, a strong financial plan. The plan should work without the person who put it together for you.
Alfonso in Ames is retiring in about five years and currently maxing out his 401(k) but not doing any other savings. Should he be saving elsewhere besides his 401(k)? Eric says it’s good to diversify between different tax buckets. You may want to find out if you have an option for a Roth 401(k). When you’re 5-10 years from retirement, this is the time to evaluate and make some adjustments so you can retire in any economy and pay the least amount of tax possible.
Listen to the entire episode or skip ahead using the timestamps below.
[0:47] – Mailbag: If I can’t save 15 percent for retirement will I be okay?
[4:45] – Mailbag: Is it bad if my financial advisor is older than me?
[7:48] – Mailbag: Should I save elsewhere besides my 401(k)?
Today’s Takeaway:
“The thing about retirement and how much income you’re going to need is really dependent on your situation.”
-Eric Peterson
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