There are many topics to cover before and during retirement. Sometimes the tricky ones may be neglected or ignored by your financial adviser. Here are a few to bring to the table:
1. Social Security - Claiming social security at 62 might not be the best deal for you. There are several claiming strategies which may put many more thousands of dollars in your pocket over your lifetime. Ask your financial adviser how these strategies may benefit you.
2. Required Minimum Distribution - RMD starts when you turn 70 1/2 for your tax-qualified accounts. The first year can be tricky with the possibility of two payments in one year. Find out the rules so you don't pay more taxes than necessary or be penalized if you forget to take the distribution.
3. Smart tax-planning - Your financial adviser cannot give you tax information (unless he/she is licensed to do so) but they can tell you what type of accounts you hold and how distributions may be taxed. Ask your tax adviser for guidance on the best withdrawal methods in retirement to keep taxes as low as possible.
4. Pension replacement - Today many people do not have pensions. Your adviser can recommend ways to set up a lifetime stream of income along side your social security benefits. Most likely he/she will suggest an income annuity, fixed annuity or immediate annuity. Be wary and shop around as annuities come in many sizes and colors!
5. Professional Help - maybe you've taken a few courses and read some books about retirement planning. You may want to do it yourself to feel in control or to avoid fees. Just like everything else, know when to ask for help and seek a professional. There may be a few critical parts you missed or need tweaking. Find a fee-only adviser to give you a second, unbiased opinion. The advice may prove invaluable.
Be $ Smart - prepare for retirement with good planning and advice.
