A great starting point when planning for retirement is to understand how you will replace your income in retirement. Retirement income sources may include:

Social Security, Pension, Retirement accounts such as 401K, IRA or Roth IRA, Additional savings, Real estate.

Developing a plan to maximize your income allows you to have an idea of how much you can spend. Of course, determining whether the amount of income you’re projected to have will be enough to meet your spending is key. To understand your spending consider:

1- How much you spend on average per month to maintain your lifestyle

2- Expenses that fall outside of your regular spending such as your dream vacation, home remodel, gifts to children and charities, etc.

3- Expenses at different life stages such as:

4- Go-go retirement years when you initially retire and have more energy for activities that can cost more

5- Slow-go years where you may spend less on activities

6- No-go years where enjoy simpler things in life, yet healthcare expenses can have a tendency to increase

Your financial plan maps out your retirement goals and pulls many various pieces of your financial life together. Your investments are a major piece of that puzzle and the strategy needs to be aligned with your goals. When you align your investments with the objectives laid out in your financial plan it provides guidance to:

An appropriate asset allocation

Balances risk and return to make sure you have enough money in conservative investments for short-term goals and enough assets geared for growth to meet longer term needs, all while considering you’re comfort level

The purpose of each account and how and when it plans to be used

How to take income from your investments in a managed and monitored way so you don’t deplete your savings

Rebalancing your account to maintain an appropriate asset allocation over time

Nobody likes to pay more in taxes than they need to. In comparison to your working years, you may have more flexibility on how and when you take income from different sources in retirement. This allows for you to consider tax planning through:

When and what account you take income from

Asset location – owning the right investments in the right accounts

Deciding when to start Social Security

When to realize capital gains or losses

Maximize charitable tax planning opportunities

Converting money in traditional retirement accounts to Roth accounts, where growth and distributions can be tax-free and don’t have required minimum distributions

One of the largest expenses retirees face is paying for healthcare, and the unknown risk of long-term care. For this reason, planning for these specific expenses on their own is important. Having a gameplan to know how to address these expenses so they are not overly disruptive to you and your family can start with:

Understanding the difference between healthcare and long-term care

Looking into options of how to cover these costs

Evaluating what role insurance can or should play

What type of Medicare plan may be best for you

Options for buying healthcare before you’re eligible for Medicare

Many people think of Estate Planning as planning for their death and shy away from addressing it. Yet, many aspects of an effective estate plan should start many years before you die and can prove extremely beneficial for you and your loved ones. This can also be a bonding and deepening process, relieving pressure on you and your children. Considerations should include:

Discussing what aging could look like and how you would want different possible scenarios to be handled

Giving strategies to make gifts to family and organizations you’d like to support both while living and as a legacy

Ways to minimize taxes while living and for your estate

How to maximize your giving to those you’d like to give to

Ensuring assets are titled properly and beneficiaries are listed appropriately to avoid needless time and expense when transferring assets

Planning for Uncertainty – The reality is that planning for your retirement has more variables than absolutes. Planning helps you make the best decision today given the information available. Having plans that take various outcomes into account and provide flexibility are very important for a successful retirement. There are ways to incorporate various scenarios through dynamic planning that can help evaluate many of these variables including:

Market returns

Inflation

How long you live

Your health

Taxes

Change of plans such as moving, inheritance, etc.