Preparing For Retirement: Start Now to Secure Your Future
What will your income look like in retirement? Will you work part-time, start a business, or spend your days traveling the world? These are just a few questions to ask as you plan for life after your working years. Retirement planning is about envisioning the lifestyle you want and creating a financial roadmap to make it a reality.
Your approach to retirement planning will likely shift as life unfolds. Events like marriage, divorce, the birth of a child, or career changes all impact your retirement outlook. While your current income and budget may provide clarity on today’s financial picture, retirement requires a fresh perspective. That’s where a financial advisor can help align your goals with actionable strategies.
Here are three considerations when thinking about your retirement space:
Portfolio Income: Building a Reliable Foundation
Your investment portfolio is a cornerstone of retirement income. The key is ensuring your portfolio generates the cash flow you need today while remaining sustainable over the long term.
Evaluate Sources and Sustainability
Start by understanding where your investments stand. Are they structured to provide reliable income? A financial advisor can help identify opportunities to optimize cash flow, such as dividend-generating assets or systematic withdrawals.
Plan for Longevity
Retirement today is often another season of life – potentially spanning decades. This means your portfolio must not only provide income now but also grow to keep pace with inflation. Consider how the cost of living has evolved over the last 30 years and project what it might look like 30 years from now.
Reassess Regularly
Market fluctuations and personal circumstances can affect your portfolio’s performance. Rebalancing investments and reviewing your strategy periodically ensures your portfolio aligns with your evolving needs. At North Main Financial, we work closely with clients to manage portfolios that adapt to today’s challenges and tomorrow’s uncertainties.
2. Social Security: Timing Matters
Social Security is another critical component of retirement income, but when and how you claim benefits significantly impacts the amount you receive.
Understand Eligibility and Benefits
If you’ve accumulated enough qualifying quarters, you may be eligible to begin drawing reduced benefits at age 62. However, waiting until your full retirement age (typically 66-68) or even age 70 can maximize your monthly benefits. Special circumstances, such as widowhood, may allow you to claim benefits earlier.
Watch for Income Limits
If you continue to earn income after you start receiving Social Security, you may exceed the annual earnings limit, reducing your benefits. Careful planning with your financial advisor can help you balance earned income and Social Security.
Plan Strategically
Social security decisions should be made within the context of your overall financial plan. A professional advisor can analyze your unique situation and recommend the optimal time to begin claiming benefits.
3. Generating Income in Retirement: New Opportunities
Retirement doesn’t necessarily mean leaving the workforce entirely. Many retirees find fulfillment and financial benefits in part-time work or entrepreneurial ventures.
Rethink Retirement Work
Unlike previous generations, today’s retirees often transition into less demanding roles, leveraging their experience or pursuing new interests. Whether it’s consulting, teaching, or working in a passion-driven industry, part-time employment can supplement your retirement income.
Supplement and Save
Additional income from part-time work can help reduce the amount you need to withdraw from your portfolio or delay tapping into Social Security, allowing these resources to grow.
Plan for Flexibility
Think about how supplemental income fits into your retirement goals. If you plan to work part-time, consider how it might impact your schedule, health, and financial needs.
Conclusion
Retirement planning is a complex puzzle, combining portfolio income, Social Security, part-time work, pensions, rental properties, and more. By working with a trusted financial advisor, you can create a strategy tailored to your goals, anticipate potential challenges, and adapt to changes along the way.
If you have questions about retirement or would like to review your financial space, call us at (704) 987-1425 or visit us virtually at www.northmainfinancial.com. If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.
These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Osaic Financial.
