Countdown to Retirement: How an Adviser Can Help You Plan
Getting answers to these key questions will boost your odds of a secure future.
As you approach the day you begin the next phase of your life, you face a series of decisions that could spell the difference between a comfortable retirement and one fraught with financial stress. Even if you have been managing your money for years, you may need professional help now. Depending on your circumstances, you could get by with perhaps a couple of sessions with a financial planner to tweak your portfolio and review your major options—or you may need ongoing help that lasts into retirement.
You can find certified financial planners in your area at www.cfp.net/learn. The Web site includes information about how the planners are compensated and profiles of typical clients. You can also find names of fee-only planners at the National Association of Personal Financial Advisors.
Take your pension as a lump sum or an annuity? Taking a lump sum allows you to invest the money as you choose; an annuity provides a lifetime stream of payments. Both options have their pluses and minuses. A lump sum invested in an IRA may provide a higher return than an annuity, but you also risk outliving your money (see Countdown to Retirement: Plan Your Exit Strategy).
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Select a single-life immediate annuity or survivorship? If you're retiring without a pension—and that's increasingly common—converting part of your savings into an immediate annuity is a way to lock in a monthly payment for the rest of your life. But as with a pension, you'll need to choose between a single-life option, which offers a higher initial payout, and an annuity that will provide income to a surviving spouse. Similarly, you'll need to decide whether to buy an annuity that's adjusted for inflation, which provides a lower initial payout but will preserve your purchasing power.
Best strategy for portfolio withdrawals? Until now, your main focus has been saving as much as possible. Soon, though, you'll need to start taking withdrawals, using strategies that ensure your money will last for two or three decades. The order in which you tap your accounts could have an impact on your retirement income, and there's no one-size-fits-all answer, says Andrea Blackwelder, a certified financial planner in Denver. For example, you may want to tap taxable accounts first to allow your tax-deferred accounts to compound unfettered by taxes for a longer period. But if you expect your income tax rate to rise in retirement, you may want to tap your tax-deferred accounts first.
When to file for Social Security? For single people, the cost-benefit analysis is straightforward: Accept permanently reduced benefits by filing at age 62, or wait until full retirement age (66 for those born between 1943 and 1954) or even later in exchange for a higher monthly benefit. But couples have a range of options based on their life expectancies, earning histories and future survivor benefits, says Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards. (You can get help with developing a plan using Kiplinger's Social Security Solutions.)
Pay off the mortgage? Many retirees long for the security of a paid-off mortgage, but at today's low interest rates, it doesn't always make sense (see Why a Long-Term, Fixed-Rate Home Loan Makes Sense). If you're paying 3.5% on your mortgage, you may be able to earn a higher return by investing the money.
Haven't yet filed for Social Security? Create a personalized strategy to maximize your lifetime income from Social Security. Order Kiplinger's Social Security Solutions today.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
Dollar Tree Stock Sinks As "Macro Pressures" Impact Consumer Spending
Dollar Tree stock is plunging Wednesday after the discount retailer missed Q2 expectations and slashed its full-year outlook. Here's what you need to know.
By Joey Solitro Published
-
Why Dick's Sporting Goods Stock Is Down After a Beat-And-Raise Quarter
Dick's Sporting Goods stock is lower Wednesday even after the retailer topped Q2 expectations and raised its full-year outlook. Here's what you need to know.
By Joey Solitro Published
-
Medicare Basics: 11 Things You Need to Know
Medicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
By Catherine Siskos Last updated
-
Six of the Worst Assets to Inherit
inheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
By David Rodeck Last updated
-
403(b) Contribution Limits for 2024: Good News for Teachers
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Last updated
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Last updated
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Last updated
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The SIMPLE IRA contribution limit increased by $500 for 2024 and workers at small businesses can contribute up to $16,000 or $19,500 if 50 or over.
By Jackie Stewart Last updated
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2024
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Last updated