The decision to retire is not one that many women take lightly, nor should they. There are extensive considerations that need to be addressed before embarking on this new chapter of life. Women encounter many unique challenges when facing the decision to retire, such as longer life expectancies, expectations of continuing in the role of caregiver, and lower 401k account balances to name a few. The following items are all aspects you will need to address before making the leap into retirement.
Investment planning, Tax strategies, Income planning
You have spent your career building up your nest egg to use during retirement. At retirement, you must now make the transition from saving to spending. Will your portfolio and income streams be sufficient to provide the retirement you’ve always wanted? Taking inventory of those monthly income streams versus your budget is a good place to start. If monthly expenses exceed income, you will need to supplement spending with money from your portfolio. How your portfolio is allocated and invested will play a significant role in meeting those spending needs throughout retirement. Factors like inflation and expected investment returns need to be considered. Now is also the time to plan for how you will withdraw money from your portfolio and if there are particular tax strategies you can employ to mitigate tax liability through the years. Women need to be especially mindful of utilizing the funds in their portfolio due to both longer life expectancies and future long term care costs.
Healthcare and Long Term Care Planning
Navigating through healthcare options leading up to retirement can be both daunting and time consuming. Continuation of your employer benefits, Cobra, Medicare eligibility and supplements are some considerations depending on your circumstances. Also, with the years leading up to age 65 being the most expensive years to purchase healthcare through the exchange before Medicare eligibility, early retirement requires special planning and affordability reviews. And while healthcare has its list of complexities, so too does long-term care planning. With women living at least 5 years on average longer than their male counterparts, the greater our need is for ensuring that our well-being is safeguarded in the future. Long-term care insurance can provide security if available to you but self-insuring is also an option to those with sizeable assets.
Estate planning, Charitable giving
Many people tend to complete their estate planning at various life milestones, but especially when nearing the doorstep of retirement. Basic documents such as wills, healthcare proxies and powers of attorney should be updated along with trusts if you have specific needs or a larger estate. By keeping your estate planning documents current, you are effectively protecting the future well-being of your loved ones and ensuring that your assets will be distributed according to your wishes. Building charitable giving into your estate plan is also an alternative way to extend your generosity and leave a meaningful legacy. Exploring vehicles such as donor advised funds, charitable remainder trusts or charitable lead trusts can provide you with the opportunity of pursuing your philanthropic goals while creating various tax advantages.
Preparing for retirement can be both exciting and stressful. After having worked long and hard to reach this point, you’ll want to be sure you have a plan in place to support many satisfying years of retirement.
If you haven’t set aside the time to map your retirement strategy, or would like a second opinion on your current plan, join us for our next Women’s Planning Initiative Event on Wednesday, September 21st at Meritage Restaurant in East Greenwich, RI. At this event, we will provide valuable advice specific to women getting ready for retirement.
Chrissy Canapari, ChFC® serves as Senior Financial Advisor and Manager of Client Services at StrategicPoint Investment Advisors in Providence and East Greenwich. You can e-mail her at firstname.lastname@example.org.
The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Megan’s opinions and comments expressed on this site are her own and may not accurately reflect those of the firm. Third party content does not reflect the view of the firm and is not reviewed for completeness or accuracy. It is provided for ease of reference.