As maturing women, the older we get the more retirement comes to the horizon of our thoughts. During my money discussion at Fashion, Fun & Finance, I shared information about three areas to consider 10 years prior to retirement: income, taxes, and estate planning.
1) Income – Determine all your income sources and how much you will receive on a monthly basis. This will help you with calculating your retirement cash flow. If you see areas of improvement, you have time to work on solidifying your income needs. A quick assessment can be dividing your current income into your total assets. This will provide an estimate of the number of years your savings will last during retirement.
2) Taxes – Evaluate the various accounts you are using to fund your retirement. A complaint retirees have is around the amount of taxes they are responsible for paying now that they don’t have many deductions. That is a major reason why it’s important to create multiple income streams or buckets. For example, an investment account is taxed differently than an IRA when you take withdrawals. Thus, it’s a good idea to have both.
3) Estate Planning – Analyze your family legacy goals. Start by answering these questions: What’s important to you and do you feel compel to support it financially? Do you want to use a portion of your assets to support specific needs of your children, grandchildren, and community? Is there a way to give and strategically reduce my taxes? Estate planning has many intricacies, but these questions are a good place to start.
This discussion provided great insights and left attendees considering their plans around retirement. This is one way I help my clients and how I can assist you with transitioning from one life phase to another. If you didn’t attend, you missed a very interactive discussion. Hope to see you at the next one!