Making the pieces of your retirement puzzle fit

Making the pieces of your retirement puzzle fit

Trying to account for all of retirement's challenges can be overwhelming. If you’re like many, you may have taken a few initial steps to start saving for the future, but need a more comprehensive plan in place. It might feel daunting; like staring at a table full of puzzle pieces, and not knowing where to begin.

Let’s look at retirement planning as if you were tackling an actual puzzle to help you make sense of the different retirement pieces.  

A picture of “retirement”

It’s hard to put together any puzzle when you’re not sure what the finished picture looks like. For some, retirement means relocating or traveling to new places and experiencing new adventures. And for others, it’s trying out a new career, or giving back to the community.

Retirement can mean very different things to different people and will likely evolve before (or even during) retirement.

Outlining how you define retirement is helpful in setting initial goals and in creating your plan. The more specific you can be, the better your understanding will be regarding the amount of money you'll need to set aside, and the tools you should consider to help achieve your goals.

 This article, How much will I need for retirement? has more ideas on how to make sure your financial plan is aligned with your vision of retirement.

Secure, reliable income that keeps up with inflation

A lot of attention is paid to accumulating assets for retirement. As fewer employers are providing guaranteed retirement income through pensions, the bulk of the savings responsibility now likely falls on your shoulders.

There are many tools you may use to build your retirement income strategy, including 401(k)s, IRAs, annuities and permanent life insurance.

The secret to retirement success isn't as simple as saving enough — it's also about effectively turning what you’ve saved into a predictable source of income that meets your needs and you won’t outlive. And that income needs to gradually increase as you age to make sure your retirement paycheck is keeping up with inflation and taxes. 

Diversification between different types of retirement income products that have different features and benefits helps you balance growth with protection, and flexibility with guarantees.

Plan for the costs of health- and long-term care

As we age, health challenges are inevitable. Without sufficient insurance or extra resources set aside, you may deplete retirement savings too fast, impact the lifestyle you hoped to lead during retirement or jeopardize financial security.

For those who are eligible, Medicare and accompanying Medicare supplement plans play an important role. However, they don’t eliminate the financial impact of a serious illness or injury. And like Social Security, for those farther from retirement, government benefits like Medicare may be less secure.

Tools like private health insurance or long-term care insurance, setting aside additional resources in tax-advantaged savings plans or leveraging the living benefits of permanent life insurance, can help with your health care plan. Saving for health expenses in retirement has some ideas that you can discuss with your financial professional.

Buffer for the unexpected

Life’s curve balls and surprises don’t stop when retirement hits. When unexpected challenges or opportunities come, it’s important to have other resources to tap into that won’t deplete your key sources of retirement income.

Building a “just in case” buffer, whether in a separate investment account or through cash value built up in permanent life insurance can help you protect your other resources and be ready for the unexpected.

Vision for your legacy

There are many ways to leave a legacy for the people and causes you care about. Making your wishes clear in a last will and testament is a good start.

For more certainty in your legacy plan, using trusts to segregate your assets can give you greater control and protect your assets from eroding factors like taxation and creditors. Another strategy is positioning assets into products designed to enhance and protect legacies, like permanent life insurance.

You don’t have to assemble the puzzle alone

Yes, there are a lot of pieces to assemble, but you get to choose what the final picture looks like. Sufficient planning and preparation can help make retirement one of the most exciting parts of your life’s journey.

You don’t have to put together the puzzle alone. Assembling the puzzle becomes a lot more manageable once you’ve sat down with an experienced financial professional who has helped others build the retirement they envisioned.

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