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As you prepare for retirement, you need to make sure you’ll have enough money to support your lifestyle. Retirement income planning can be complicated and highly personal. Below is some helpful information for better understanding the decisions before you.
Knowing your goals for retirement is one of the most important steps in effective planning. Unfortunately, there isn’t really an average retirement income amount that will work for everyone. One old rule of thumb suggests you need enough savings to earn 80% of your current annual income each year for 20 years.
Retirement income planning is preparing your retirement accounts for distribution. This is the phase in which you start taking money out of your savings to support your life in retirement. In addition to planning your retirement income, you should also estimate your tax liabilities. With many traditional retirement accounts, you pay taxes during distribution. In Roth accounts, you pay taxes upfront.
Another element to consider is the option of guaranteed lifetime income. These financial products make a lot of the distribution planning simpler. You can be certain how much money you’ll have each year. If you opt for a traditional retirement plan, consider how you will protect your capital against downsides. Some financial services providers can help you avoid losing too much in a bad market.
Planning for retirement can be a complicated process. Contact Affinity Advantage Financial Solutions to get the help you need.