Financial Strategies For Successful Retirement


Tax Benefits For Retirement Accounts

Investment Strategies For Retirement

Saving in a tax-deferred vehicle, such as a traditional IRA or 401 plan, may reduce your current taxable income. If you have a 401, your taxable income is reduced by what income you defer to the plan, and if you have a traditional IRA, you may be able to claim your contributions as a tax deduction.

Earnings in such vehicles also accrue on a tax-deferred basis, but the assets are taxed when you distribute or withdraw them from the retirement account. You may pay less in income taxes on amounts saved on a pre-tax basis if you make withdrawals during retirement and your income tax rate is lower than it is in your pre-retirement years.

By using post-tax funds to save for retirement, you won’t have to pay taxes again when you withdraw them during retirement. However, your earnings on post-tax funds are usually not tax-deferred. So when you withdraw these amounts, they may be taxed at your ordinary-income tax rate or a capital gains rate, depending on the type of income and the duration for which you held the investments.

If you are eligible for a Roth IRA, you may want to ask your financial planner whether it is beneficial for you to use one even for only part of your savings. Roth IRAs are funded with after-tax assets, earnings accrue on a tax-deferred basis, and distributions are tax-free if you meet certain requirements. According to Kristi Sullivan, CFP®, Sullivan Financial Planning, LLC, Denver, CO.:

Put Net Worth Into Your Retirement Goals

Its been said that you cant reach a goal you never set, and this holds true for retirement planning. If you don’t establish specific goals, its hard to find the incentive to save, invest, and put in the time and effort to ensure you’re making the best decisions. Specific and written goals can provide the motivation you need. Here are some examples of written retirement goals.

  • I want to retire when Im 65.
  • I want to travel internationally for 12 weeks each year.
  • I want a $1 million nest egg to fund the retirement I envision.

Regular net worth “check-ups” are an effective way to track your progress as you work toward these goals.

Understand Your Time Horizon

Your current age and expected retirement age create the initial groundwork of an effective retirement strategy. The longer the time from today to retirement, the higher the level of risk that your portfolio can withstand. If youre young and have 30-plus years until retirement, you should have the majority of your assets in riskier investments, such as stocks. There will be volatility, but stocks have historically outperformed other securities, such as bonds, over long time periods. The main word here is long, meaning at least more than 10 years.

Additionally, you need returns that outpace inflation so you can maintain your purchasing power during retirement. Inflation is like an acorn. It starts out small, but given enough time, can turn into a mighty oak tree, says Chris Hammond, a Savannah, Tenn., financial advisor and founder of

Weve all heardand wantcompound growth on our money, Hammond adds. Well, inflation is like compound anti-growth, as it erodes the value of your money. A seemingly small inflation rate of 3% will erode the value of your savings by 50% over approximately 24 years. Doesnt seem like much each year, but given enough time, it has a huge impact.

You might not think that saving a few bucks here and there in your 20s means much, but the power of compounding will make it worth much more by the time you need it.

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Strategies For Successful Retirement: A 5

Abstract The approach to teaching investment and retirement classes described in this article was spread out over a 5-week period. The series of classes includes four classroom sessions and one individual consultation with a certified financial planner. Of those participants surveyed after 5 months, 57% had made changes, and 28% more still planned to make changes in their investments. Participants also appreciated the individualized financial plan developed during the course and used it to make financial decisions.

Kurt M. Jones Colorado State University Cooperative Extension Salida, Colorado Internet Address:

Cooperative Extension professionals and others have been offering estate planning and other financial planning workshops for many years . Many clients have participated in these 1-day workshops, but they often leave needing additional help or wanting more classes.

Why Education Vs Information


Taught by a Fiduciary, this course helps you gain information and resources to make wise and informed decisions to create a common-sense strategy for your retirement. It is designed to deliver comprehensive and objective knowledge that may be easily applied to an individuals situation. When considering crucial subjects such as retirement planning, it is imperative to learn from a proven and reliable source.

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How To Start Saving For Retirement

While starting early is always important even $25 a month in your 20s is helpful it’s OK to set money aside for more immediate needs first and then start tackling retirement in your late 30s and early 40s. However, you don’t want to wait much beyond that because you’ll need time to put money into a retirement account for that money to grow. The longer you wait the more you’ll have to sock away yearly making the challenge a lot more difficult.

Accounts You Can Use For Retirement Savings:

High-yield savings account

It’s risk-free money inside of a federally-insured savings account does not get invested in stocks or bonds but you’ll make next to nothing on the funds in the account. Currently, the highest-yielding savings accounts are under 1% on the dollars saved, and have been trending down with current Federal Reserve policy to keep its benchmark rate lower for longer. Your money should grow more over time in a more traditional investment savings vehicle.

Traditional Individual Retirement Account

The IRA is a tax-advantaged investing tool for individuals to earmark their retirement savings. Depending on the individual’s employment status, IRAs can be of various types and have different tax liabilities. As the name suggests, it’s an individual account that you open and contribute to yourself. One of the benefits of the traditional IRA, as it’s called, is that contributions are, generally, tax-deductible. So, for example, if you contribute $6,000, your taxable income will decrease by the same amount.

Roth IRA

Simple IRA

Traditional 401 plans

A 401 is a retirement account offered by a company for its employees. Contributions into this account are pre-tax, which means that like the traditional IRA they can grow on a tax-deferred basis. You will have to pay the taxman when you withdraw those funds, but if you’re in a lower tax bracket in retirement than you were during your working years, then that tax hit shouldn’t be too great.

Roth 401

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Youre The Owner Of Your Team

Think of retirement in terms of a football team, and youre the owner. As the owner, you dont personally coach the team, draft the players, or even play on game day. Instead, you have a head coach, a general manager, offensive and defensive coordinators, players, and many more who support your ultimate goal of winning the championship, or in this case, retiring successfully.

In this case, as the owner, you surround yourself with trusted professionals along the way. Having a financial planner as the head coach or your retirement can help coordinate your finances between other professionals like CPAs and attorneys. As you prepare to retire, you need to make many difficult decisions. With a financial planner you can trust by your side you can navigate these choices more adeptly.

According to a 2013 white paper from Morningstar called Alpha, Beta, and NowGamma, having a financial planner who practices specific financial planning techniques, can produce up to 22.6% more income in retirement per year. Thats regardless of the underlying investments. These retirement strategies and financial planning techniques bring together multiple facets of retirement. If thats not an eye-opening statistic on why you need a financial planner, Im not sure what is.

Tax Efficient Cash Flow Planning

Let Jacobs Financial Services help develop your retirement strategy

Once youve decided to retire, it may be difficult to grasp how youll meet your monthly spending needs no longer having consistent income from Oxy. We can help you develop an optimal withdrawal and cash flow strategy to potentially minimize taxes during retirement through careful planning. Determining the optimal cash flow strategy can greatly impact the probability of not outliving your assets.


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The Secure Act & Stretch Iras

The SECURE Act was snuck into legislation in late 2019 under the noses of most Americans. Touted for the good thing it does by pushing required minimum distributions to age 72 from 70 ½.

In reality, there are sneaky provisions that limit the powerful tools used in estate planning. The Stretch IRA is now limited to a 10-year spend down. That means unless you leave your legacy to a specific type of eligible beneficiary, most beneficiaries will have to withdraw the entire inheritance within ten years. The problem that arises here is now your beneficiaries may have an incredible new and unavoidable tax burden from these withdrawals.

Fortunately, there are ways of mitigating this with proper estate, tax, and insurance planning. If you havent made an effort to get your estate plan updated for the SECURE Act, you should consider it. Retirement strategies need to be fluid to move around changes like the SECURE Act. You need to adjust your plan to law changes like this so you know that your plans strategies are still effective for retirement. We did an expert roundtable discussion on the SECURE Act bringing together an estate planning attorney, CPA, financial planner, and insurance expert. Give that a watch for more information.

Retirement Strategy #: Keep Your Estate Plan Current

Family is essential to most of us. Developing a plan for your estate is something you do more for your loved ones than for yourself. So, when you think about how much life can change in a short amount of time, its important to keep your estate plan updated. You should review your plan every few years at the least to make sure you and your family have what they need in the event you pass on.

Weve all been there when a family member passes away. Im sure some of you have dealt with nightmarish legal and financial issues in the wake of a death in the family. Instead of focusing on what truly matters, grieving and memorializing, your attention is directed to the minutiae of the estate. Keeping your estate updated is a gift that will keep on giving in your absence.

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Tips For A Successful Retirement

Twenty Tips for a Successful Retirement

Barbara ONeill, Ph.D., CFP®, Rutgers Cooperative Extension,

Retirement planning today is very different than it was 30 or 40 years ago. It is truly not your fathers retirement. In fact, many people dont even relate to the word retirement. Phrases like second act, third age, and refirement have been used to describe the stage of later life where people transition from full-time work to other pursuits. Some people have even stated on surveys that they never plan to retire, period.

A few generations ago, defined benefit pension plans were plentiful. Workers were promised benefits according to a formula based on their income and years of service. Employers bore the actuarial risk of setting aside sufficient funds to provide a monthly income stream to workers for life but average retirements were short and lasted only about 5 years. Today, DB pension plans are much less common. The most common type of retirement plan today is the defined contribution plan plans) where workers bear all the investment risk.

All of these trends highlight the need for advance planning and personal responsibility in order to live comfortably in later life. Below are twenty tips to consider to achieve a successful retirement:

Before Retirement Tips

After Retirement Tips

Saving For Retirement: The Quest For Success

Financial Strategies For Successful Retirement (Gray Castle)

The main goal of a successful retirement plan is to ensure you will have sufficient financial resources to maintain or improve your lifestyle during your retirement years. If you want to travel and make more purchases in retirement, you will have to save more. How much you will need to save will depend on how you want to spend your retirement.

According to some financial planning experts, you will need to save enough so that your retirement income is in the range of 70% to 80% of your pre-retirement income. You will need a higher percentage if you plan to improve your standard of living. If you have more expenses in retirement than before retirement, your retirement income may have to be more than your pre-retirement income.

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Oxy Retirement Plan & Supplemental Retirement Plan Pension Analysis

Lump-sum versus monthly payments. We can help maximize the full potential of your Oxy Retirement Plan or your Oxy Supplemental Retirement Plan, optimizing your income and taxes during retirement.

As a fully independent Registered Investment Advisor and fiduciary with over 25 years of experience, we have a legal obligation to put your interests first. Accordingly, our fee-only model seeks to provide objective advice without the conflicts of interest commonly seen with banks, brokerage firms, and mutual fund companies.

Budget For A Long Retirement

Some people use the term financial independence as a synonym for retirement. While thats understandable, the truth is your dependence just shifts — from a paycheck to your portfolio.

A secure retirement starts with leaving the workforce only when you truly have enough resources. While research has found that approximately 50% of those who retire at age 65 will have to cut back on their lifestyles, that percentage drops to just 15% for those who retire at age 70. Thats the power of more years of saving, and of delaying Social Security.

The other important factor is withdrawing a reasonable amount each year. Due to historically low interest rates on cash and bonds, the old 4% rule may no longer be as safe as it was in the past. Some research indicates that 3% to 3.5% might be better, or using the percentages that determine required minimum distributions to guide how much a retiree can spend annually.

Finally, consider your backup assets — such as home equity, life insurance, rental properties, and other assets of value — that you could sell or borrow against in case of lower-than-expected investment returns or higher-than-expected expenses.

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Heres How Old School Investing May Just Protect Your Retirement

Asset classes with relatively high yields, even in this market, include high yield corporate and municipal bonds, international and emerging market debt, Real Estate Investment Trusts , Master Limited Partnerships , preferred stocks, non-traditional lending, international dividend paying stocks, option strategies and others. Investors need to understand that these yields are high because they carry more risk than traditional high-grade fixed income. The risk may come in the form of illiquidity, default, high volatility, or all three. Exclusively chasing high yielding investments is ill-advised and may derail your finances. Investors should work closely with a knowledgeable financial advisor or tax professional to determine how these investments make sense within the context of their overall portfolio and help determine the amount of risk.

3) Total return approach: Interest and dividend payments are not the only way to generate cash flow. Investors can also sell their appreciated stocks to help meet their income needs. Supplementing dividend and income payments with long-term capital gains is known as a total return approach. In recent years, with the markets hitting all-time highs and yields continuing to fall, this has proven to be a strategy worth considering.

Save A Percentage Of Your Current Income

Investing Insights: The Keys to Financial Success and A Tool for Retirement Planning

Does your employer have a 401 or Roth IRA plan where you can invest a percentage of your paycheck? If you arent sure how much to invest, connecting with a financial advisor can help you get a plan in place to ensure youre ready for retirement.

An advisor will consider things like your age, the number of years you plan to keep working, and your current living allowances and expected expenses. These factors all play into how much you should have saved up before you retire from your career. Planning for retirement takes calculated cash flow maintenance, effective portfolio maintenance, and social security monitoring.

Many people see saving as restrictive. However, saving consistent amounts each month can actually free you up financially. As you set aside a percentage of your income, you can also allot some funds to spend on personal wants. When you go to buy something, youll no longer have to wonder if you can afford it, because youve already set aside your necessary savings. 401s and other retirement vehicles are especially nice because they take the money from your paycheck before it ever hits your bank account. You dont miss money that you dont see!

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Here’s A Look At Some Of The More Popular Investment Options:

Stocks for growth

The majority of savers still buy stocks either directly or through a mutual fund or exchange-traded fund which are shares in a publicly listed company. Stock prices tend to rise over the long-term, which is why people buy them. Since 1926, the S& P 500 has posted a 10.24% average annual return with dividends reinvested, according to S& P Dow Jones Indices. In other words, if you invest in equities in your 30s and retire in your 70s, there’s a high likelihood that your money will have grown over those 40 years.

The downside is that stocks can fall. In the Great Recession of 2008 and the more recent pandemic stock market plunge, stock prices dropped by more than 35%, which caused a lot of problems for those in and nearing retirement.

Bonds for safety

Bonds are another popular investment for savers as they can move a lot less in price than stocks. Investors lend money to a government or company in exchange for an annual payment based on a predetermined interest rate. At the end of that bond’s term usually between one and 30 years you get back your original investment. Investors like bonds for two reasons: they get some guaranteed annual income and there’s less risk, depending on the kind of bond you buy, of losing any money. Because of this, bonds tend to fluctuate less than stocks and so they balance out a portfolio’s overall ups and downs.

Alternative asset classes

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