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Top 4 Retirement Planning FAQ’s

Helping plan for a successful retirement is one of our favorite ways to help our clients.  We like to connect the dots between our clients retirement savings and a plan that helps them continue on the path to their best life.  Here we discuss a few of the common questions that we get asked by our clients, and how we approach the topics.

Do I have enough savings to retire?

This is one of the most common questions that we get asked by clients, which isn’t a simple yes or no answer.  Until we understand your retirement vision, and what needs to happen for you to have a fulfilling retirement, we can’t provide an answer.

Our process begins with completing a Retirement Success Analysis questionnaire that we have created, which encourages you to brainstorm your goals and dreams.  It really gets you thinking about all the things that you have always wanted to do, but couldn’t while you were working.  We always encourage our clients to not focus on what they are retiring from, but what they are going to retire to.  The questionnaire also gathers your financial information including how much you have saved for retirement and any debt that you may have.

We then compile all the information into our comprehensive planning software and create a customized plan for you.  The plan takes into consideration your retirement assets, projected living expenses, goals during retirement, and how various growth rates and inflation may affect your plan.  This analysis then allows us to project how much in retirement savings you need to sustain the retirement you desire.

We recommend that you review your retirement analysis at least annually, to adjust for any changes if necessary, and make sure that you are still on track.

When should I draw Social Security?

There is no one-size-fits-all answer – you should consider your current cash needs, current health, and family longevity, and income sources in retirement.  It can be tempting to begin drawing as soon as you are eligible at age 62, but this could be a costly move.  One of the most important things to keep in mind about Social Security is that the earlier you start drawing, the smaller your monthly payment will be.   Your benefit amount increases by 8% for every year that you wait to draw social security until you turn age 70.  There are not many places in our current investing environment where you can earn 8% on an investment.

Choosing the right strategy for married couples is a little more complicated.  What many people don’t know is that they have the ability to draw half of their spouse’s Social Security amount if it is higher than theirs, without affecting the others benefit amount.  In the event of the spouses passing, if their benefit was higher they will begin to receive the higher of the benefit amounts, but not both.  Often times it makes sense for the higher earner in the couple to postpone as long as possible, to enhance the amount that the surviving spouse will receive at their passing.

We recommend that you consult with a financial planning professional before you make your election as it is important to consider all these factors when making this decision, as once you have made your election you only have 12 months to make any changes, and then it is permanent.

Should I pay off my mortgage?

There are several factors to consider before using your existing savings to pay off your mortgage.   Although it may be tempting it is important to consider the opportunity cost of paying off that debt, and as well as the potential impact to your tax situation.

The lower the interest rate on your mortgage, the less that you will benefit by paying it off early.  Suppose your mortgage interest rate is 4% and you are in the 28% tax bracket, your after tax mortgage rate is roughly 2.9%.  From a numbers perspective, if you invest the cash that you were going to use to pay off the mortgage and achieve an investment return higher than 2.9% you are getting a better benefit by not paying it off.  We like to think of it as making the most out of what you have accumulated, and letting your money work hard for you.

Another factor to consider is if you are currently deducting your mortgage interest.  If you pay off your mortgage you will no longer have that deduction, and is important to consider how that may affect your itemizing going forward.

Ultimately the decision is up to you, we just aim to provide you with all the options so that you make an educated decision that is best for your personal situation.

What will happen to my accounts upon my death?

Your retirement accounts such as 401(k)’s, IRA’s and Roth IRA’s will pass according to the beneficiary designation that you have elected.  It is very important that you review these designations periodically as your wishes may have changed and to make sure that who you previously elected is still living.

Any accounts that you own by yourself will pass according to how you have listed in your will, thus will go through probate.  To eliminate the need for those accounts to go through probate you can add a Transfer on Death (TOD) designation which is essentially adding a beneficiary to the account.  Having a TOD or beneficiary designation allows the money to be passed to your heirs sooner, which can help reduce the burden of any immediate liquidity issues.

Retirement is not a decision that you should take lightly, and we recommend that you consider enlisting the help of a trusted advisor to help you make sure that you are covering all your bases to minimize any surprises along the way.



This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Opinions expressed are those of the advisors at Sweet Financial Services and are not necessarily those of RJFS or Raymond James. All opinions are as of this date and are subject to change without notice. Every investor’s situation is unique, you should consider your investment goals, risk tolerance and time horizon before making any investment or financial decision. Prior to making an investment or financial decision, please consult with your financial advisor about your individual situation. The projections or other information generated by financial planning software regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results There is no assurance that any strategy will ultimately be successful, profitable or protect against loss.


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