Saving for retirement can be confusing. How much of my earnings am I supposed to save for retirement? What retirement plan options do I have? What investments are best for my situation? A good rule of thumb is to try to put at least 10 percent of your earnings toward retirement savings. The answers to the other questions, however, are more difficult.

If you are lucky, you have options through your work. Your company may potentially offer a pension or more likely a retirement savings plan like a 401k. Some firms may even offer matching – a system that involves the organization contributing as much to your retirement plan as you do up to a certain percentage usually 3 or 5 percent. Self-employed and small business owners have a variety of retirement savings options as well including solo 401(k), SEP-IRA and other plan types. If you are setting up a new retirement plan for your business, we can help you evaluate the pros and cons of the different plans. 

Diversification in Retirement

Picking a single place to put your money would be as silly as investing in the stock market and only choosing one stock. The more money you have, the more you have to lose, and the older you are, the less time you have to make up for a lousy investment.

Diversification involves spreading your investments across several different assets. Ideally, this will include many investment classes. The idea is to avoid putting all of your eggs in one basket. Try to open several different investment accounts as well as real estate, stock investments, and cash.

Diversification also includes saving for retirement ideally with tax-deferred and tax-free accounts. We don’t know what tax rates will be in the future. Currently, they are at historically low rates but whether that remains is an open question. Saving for retirement with pre-tax and post-tax dollars hedges this uncertainty. 

Life insurance is another option for retirement planning. Gone are the days when life insurance was only about the death benefit to your heirs. Life insurance has many new options for after-tax cash flows in retirement. Fixed Indexed Universal Life is a retirement plan option that I think has a lot of potential for people and it may get its own blog down the road. 

Conclusion

When it comes to retirement, failing to plan is planning to fail. Let us help you prepare for your future. Contact us today to get started. We would be happy to answer any questions that you have and if necessary, we have relationships with financial advisors, estate planning attorneys, insurance brokers, and other professionals in the area who can help as well.