Financial Planning in Retirement
The importance of financial planning doesn’t change at retirement
If you’re like many, you may assume that financial planning ends once you retire. After all, retirement is a major life milestone that you’ve planned and saved toward for many years, and it’s often a great relief to finally retire. But the notion that financial planning is no longer needed is mistaken and can lead to financial difficulties down the road.
If you consider the reasons for financial planning, including assessing and managing cash flow, investments, retirement savings and distributions, insurance coverage and even estate planning and trust needs, none of this ends abruptly the day you say goodbye to your employer.
So what does financial planning in retirement look like? First, managing cash flow is paramount in retirement when you are no longer receiving a steady paycheck, raises or bonuses from an employer. You’ll need to ensure you have enough income from your savings and investments to maintain your desired standard of living. It's important to consider your current financial objectives and risk tolerance, and make the necessary adjustments to your investment portfolio to reflect this new phase of life. In addition, after having invested in your retirement savings for so long, it’s critical to develop and maintain a prudent retirement income distribution strategy.
The strategies you employ to keep your taxes to a minimum may also change after retiring. Once you receive Social Security and are required to take distributions from your retirement accounts, you’ll need to explore new ways to keep more of your money.*
Evaluating and regularly reassessing your family’s ability to experience financial security upon your death is also valuable. No one likes to think about the inevitable, but knowing you have plans in place, including using tools such as life insurance, wills or trusts, may offer you peace of mind and future financial stability for your loved ones.
It’s a lot to tackle on your own. Many people seek the advice of a qualified financial or tax advisor to help them through their retirement journey. If you have concerns about managing your finances in retirement, we are standing by to serve you. Email firstname.lastname@example.org or call (703) 810-1072, ext. 110, to schedule a free consultation.