Summerlin Benefits Consulting Q&AAnswer
Dec 26, 2024 - 09:42 AM
Before deciding to retire, there are several important factors to consider:
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When to Retire: The decision of when to retire depends on personal circumstances. Key questions include whether you’ll receive a pension, if you feel financially prepared to retire without outliving your savings, and how you will fill your free time once you stop working.
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Financial Preparation: It's crucial to ensure you have a solid financial plan. Many people have 401(k)s or IRAs that they’ve been contributing to during their working years. If you have a "stray 401(k)" from a previous employer, it’s advisable to take control of it and manage it effectively.
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Risk Management: As you approach retirement, experts recommend reducing your portfolio's risk. A general guideline, "The Rule of 100," suggests subtracting your age from 100 to determine a reasonable level of risk for your investments. The rest of your portfolio should be protected in low-risk vehicles, such as Fixed Index Annuities (FIAs), which offer safety from market declines while continuing to grow over time.
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Additional Considerations: If you are closer to retirement, you might focus on balancing growth with safety and stability in your investments. Additionally, you should consider whether you want to leave legacy funds for your children or grandchildren.
Planning early is key, even if retirement seems far off. The earlier you start, the more you benefit from compounding interest and recovery during market downturns. And if you're unsure about how to proceed, working with financial experts like Summerlin Benefits Consulting can help reduce stress and guide you through the process, ensuring you feel confident in your retirement plan.
