True to form, Baby Boomers are redefining retirement too! The 76 million Americans born from 1946 to 1964 have driven major national trends in their lifetime and are living longer than any previous generation. Today, with the oldest of them having turned 60, some are already retired, or have been forced to retire, and many more are thinking seriously about retirement.
And there’s a lot to think about for the aging boomer:
- Do you want to retire outright and never work again? How many years do you need to keep working before you can realistically afford to do that?
- Do you have the opportunity or desire to “reinvent” yourself and start a new career – in other words, retire sooner from your present job and spend more years following a passion that can also provide at least a modest income?
- With large corporations continuing to downsize, your company may offer you a retirement package. If so, it makes a big difference how you choose to receive it. If handled well, how far can your package take you toward financial independence?
- If your corporation offers a traditional pension – perhaps in addition to a 401(k) plan – how much is your pension account worth? Have you been with the company long enough for those assets to be fully vested? Will the plan continue to be funded? Should you take your money as a lump sum? What about your beneficiaries?
- When it’s time to take your 401(k) assets, how do you transfer them to an IRA without tax consequences? What’s the best way to designate beneficiaries for your legacy?*
- If you’re fortunate enough to have stock options as part of your corporate compensation plan, how should they be factored into your retirement plan? Do you fully understand what you own?
- Once you’ve retired, how much can you take from your account each year and still be confident that you won’t outlive your money? What is the best way to structure your assets to benefit your heirs? What role should life insurance play in retirement and estate planning?
- Federal tax law is designed to reward investing for retirement, but it gives the full rewards only to those who know how to take advantage of the rules. The options are many, the rules are complicated, and tax laws change from year to year.
How can you get all this under control without making it a full-time job? That’s where your financial advisor, along with your tax and legal advisors, comes in. Ask these professionals to help you address concerns connected with planning your retirement – everything from clarifying your dreams of financial independence to the psychology of spending and saving to developing an investment policy statement to planning your estate.
* Withdrawals are subject to ordinary income tax and may be subject to a federal 10% penalty if taken prior to age 59 ½. Wells Fargo Advisors / Wells Fargo Advisors Financial Network is not a legal or tax advisor. However, our Financial Advisors will be happy to work with you and your chosen tax and legal advisors to help you meet your financial goals.
This article was written by Wells Fargo Advisors and provided courtesy of Graham H. Neal, Jr., Senior Vice President – Investment Officer in Kilmarnock, VA at 804-435-1636.
Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.
CAR Approval Number: 0512-0117