Tomorrow in Focus: Saving for Your Ideal Retirement – Sara Thomas, CFP, ChFC, Financial Consultant, TIA-CREF Field Consulting Group
*** Note – These are my personal notes blogged LIVE so please excuse the typos – also there may be personal comments.
- Story – Ms. Thomas’ grandfather died suddenly and her grandmother was lost, having never written a check, paid a bill, etc. At 8-years old, Ms. Thomas decided that she would never be in that position.
- What is your ideal retirement? Travel / new home / volunteering / family & friends / hobbies – very individualized / personal
- what is YOUR ideal retirement? Created in your own mind – customize around your own life
Retirement savings v. retirement income
- which is better?
- $1 million to retire on OR $5k a month to retire on
many experts believe you will need between 70%… Retirement Readiness: The asset/salary ratio graph
- based on your current income – 4.5 of current salary in assets that they have saved – based on number of years to retirement & income replacement goal – To replace 80% of income
TIAA-CREF Retirement Advisor – online
- Answer your most important retirement questions and find out how to help reach your goal:
- Set goal
- Enter information
- Pick your strategy
- Take action
The High Cost of DELAYING Investment strategy: A primer
- Consider a mix of investment products & vehicles:
- Employer-sponsored retirement plans: 401(k), 401(m), 403(b), 457(b)
- supplemental plans: Keoghs, after-tax annuities, IRAs, mutual funds
- equity investments
- fixed-income investments
- guaranteed investments
- Real estate
What’s the right mix for you? Work with an advisor for your plan Which IRA is right for you? “Individual Retirement Account”
Traditional IRA
- tax-deductible contributions, if under income limits
- tax-deferred accumulation
- withdrawals are taxable as ordinary income
- balance is subject to IRS minimum required distributed
Roth IRA
- After-tax contributions
- Eligible if within income limits
- Tax-free accumulation
- Withdrawals are tax free*
- Balance is not subject to IRS minimum
- If you are over income limits, consider conversion to Roth
Important IRA considerations
- Your tax bracket now
- Your projected tax bracket in retirement
- deferred income option beyond age 70 1/2
- Access to funds in the event of an emergency
- Are you “maxing it out”? – Are you taking full advantage of it?
Social Security retirement benefits
- visit www.ssa.gov
- understand your choices for income
- the full benefit age is gradually increasing
- how much do you expect Social Security to Replace of your income – can be different per person / individual (based on your contributions / when you start)
Financial well-being for you and your family
- Life insurance
- Help protect your assets for your family
- Help protect your family from undue burden
- Ultimate plan for the unforeseen
- Can have their own value
Healthcare
- Account for one of retirement’s largest expenses
- Disability insurance
- Life expectancy
Long-term Care Insurance
- Be prepared
Income once you retire
- Customize an income stream
- creating an income that will cover your daily needs and requirements
When a lifetime annual makes sense The flexibility of cash withdrawals 70 1/2 IRS requirement minimum distribution rules Consider how consolidating assets might help Meet with a TIAA-CREF representative at least one year prior to retirement to review options Retirement income worksheet (handout) – cash-flow worksheet
- look at what you are spending – will these expenses continue after I retire?
Case Study
- Tim “The Tool Man” Taylor
- Clair Huxtable
Questions: Closing comments – The key to Write Down your goals because you are more likely to Meet your goals – Seal it up and they will mail it to you in a couple week so that you are reminded of those acton steps for the future.