What a decade this has been for retirement planning! Coming out of The Great Recession and into COVID-19 has many Americans nearing retirement considering not retiring as they have planned. Sometimes revising your financial plan and way of thinking is all you need to make retiring on time a reality. Check out these steps to help you revise your financial plan:
If your portfolio contains investments that are not producing returns to validate its expense, lower-cost investments may meet your needs. The cost of investing is decreasing; are yours reflecting this?
In the past, financial advisors received compensation only through commissions. Each time an investor contributed to their investment accounts they would pay a commission. Now, financial advisors are choosing to receive compensation for the advice and assets they manage instead of commission.
The more assets under management and increasing performance, the greater the compensation advisors receive since they charge based on the AUM’s (assets under management) value. When the portfolio’s value decreases, so does their compensation, which saves you money if the portfolio’s value drops.
A down market can be devastating if it happens early in retirement. An asset class including annuities hinders the premature liquidation of market-sensitive assets, allowing the portfolio’s market-sensitive assets to recover before liquidating. Unless you are in the RMD phase, you can choose which assets to liquidate first, and so on, and start the annuitization process. Your financial professional additionally may offer other types of investments that are not market-sensitive and appropriate for your circumstance.
Building portfolios are part of the client relationship. And financial advisors can provide financial advice, and other services through their association with other professionals. These include tax and legal professionals whose services may offer a reduced rate or as part of the fees you already pay your advisor.
If you are considering not retiring due to our current economic situation, now is an excellent time to revise your financial plan. Retiring while healthy and having the financial means may be the best decision for you.
Disclosure: This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation. An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax-qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to non-qualified distributions. Consult a tax professional for specific information.
At Senior Tax Advisory Group, each one of our seasoned professionals is a vital part of your financial team. Our team has experience in all aspects of financial planning. We have what it takes to provide you with a comprehensive retirement plan. Contact us today to schedule an introductory meeting!