Planning for retirement is no easy task. As you progress through your career and transition into retirement, there is a lot to be aware of. Look out for these retirement blind spots along the way.
Retirement Blind Spot #1
You may plan to get your retirement income from many different places. Maybe you've planned on a mix of guaranteed sources (like Social Security and possibly a pension) and non-guaranteed sources (like withdrawals from your investments). Did you know there are ways to add more guaranteed income to your retirement cash flow each month? Income annuities are an option you may want to consider.
Retirement Blind Spot #2
Did you know that more than half of people claim their Social Security retirement benefits at age 62 instead of waiting until their full retirement age or later? That means that many people are leaving money on the table. So recognize this blind spot and don't rush into a Social Security claiming decision. Remember that Social Security will likely be just one part of your overall retirement income plan—and you want to make sure you get the most out of that part.
Retirement Blind Spot #3
Many people think about asset allocation—meaning how your overall money is divided among different types of investments—as an important factor in growing and protecting your retirement savings. But if you're not also thinking about asset location, you might be missing out on smart tax planning. Understanding how different types of accounts are taxed—or not taxed—in retirement can help you make better decisions. Talk to your tax advisor to make sure you're considering the tax implications of the different types of accounts you might own.
Retirement Blind Spot #4
Chances are you have a good deal of your retirement savings in tax-qualified accounts like IRAs and 401(k)s. You probably know that when you turn 70½, you have to start withdrawing some of that money via required minimum distributions. What most people miss, though, is that there is an additional option when it comes to required minimum distributions. You may be able to defer some of your required minimum distributions until as late as age 85 if you don't want or need that income—or the associated taxes—now.1
Retirement Blind Spot #5
In today's DIY world, it makes sense to use online tools, calculators, and articles to help you make sense of what you need to do in retirement. It's good to do your homework, but you don't have to do it all yourself. A trusted financial professional can help you prioritize, think holistically about your retirement, and get you to where you want to be.
Now that you are aware of the five retirement blind spots, it's a great time to get in touch with a New York Life agent and review your retirement plan. Contact us today, and keep your eyes on the road—to retirement!
1 New York Life does not provide legal, accounting or tax advice. You should obtain advice specific to your circumstances from your own legal, accounting, and tax advisors.